S-4

As filed with the Securities and Exchange Commission on October 10, 2006

Registration No. 333-      

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SKILLED HEALTHCARE GROUP, INC.

and the additional registrants listed on the following pages

(Exact name of Registrant as specified in its charter)

Delaware	8051	95-4644784
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

27442 Portola Parkway, Suite 200

Foothill Ranch, California 92610

(949) 282-5800

(Address, including zip code, and telephone number,

including area code, of Registrant’s principal executive offices)

Boyd Hendrickson

Chairman and Chief Executive Officer

Skilled Healthcare Group, Inc.

27442 Portola Parkway, Suite 200

Foothill Ranch, California 92610

(949) 282-5800

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Jonn R. Beeson, Esq.

Latham & Watkins LLP

650 Town Center Drive, 20^th Floor

Costa Mesa, California 92626-1925

(714) 540-1235

Approximate date of commencement of proposed sale to the public:  From time to time after this Registration Statement is declared effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class of	Amount	Offering	Aggregate	Registration
Securities to be Registered	to be Registered	Price per Note(1)	Offering Price(1)	Fee(2)
11% Senior Subordinated Notes due 2014(3)	$200,000,000	100%	$200,000,000	$21,400
Guarantees of the 11% Senior Subordinated Notes due 2014(4)	N/A	N/A	N/A	N/A

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act.
(2)	Calculated pursuant to Rule 457(f) under the Securities Act.
(3)	The 11% Senior Subordinated Notes due 2014 will be obligations of Skilled Healthcare Group, Inc.
(4)	Each of the domestic subsidiaries of Skilled Healthcare Group, Inc. that are listed on exhibit 21.1 will guarantee the 11% Senior Subordinated Notes due 2014 of Skilled Healthcare Group, Inc. Pursuant to Rule 457(n), no additional registration fee is being paid in respect of the guarantees. The guarantees are not traded separately.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

ADDITIONAL REGISTRANTS

	(State or Other		(Primary Standard
	Jurisdiction of		Industrial
	Incorporation or		Classification Code		(I.R.S. Employer
(Exact Names of Registrants as Specified in Their Charters)	Organization)		Number)		Identification No.)
Alexandria Care Center, LLC		Delaware		8051		95-4395382
Alta Care Center, LLC		Delaware		8051		20-0081141
Anaheim Terrace Care Center, LLC		Delaware		8051		20-0081125
Baldwin Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854609
Bay Crest Care Center, LLC		Delaware		8051		20-0081158
Briarcliff Nursing and Rehabilitation Center GP, LLC		Delaware		8051		20-0080490
Briarcliff Nursing and Rehabilitation Center, LP		Delaware		8051		20-0081646
Brier Oak on Sunset, LLC		Delaware		8051		95-4212165
Carehouse Healthcare Center, LLC		Delaware		8051		20-0080962
Carmel Hills Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-4214320
Carson Senior Assisted Living, LLC		Delaware		8051		20-0081172
Clairmont Beaumont GP, LLC		Delaware		8051		20-0080531
Clairmont Beaumont, LP		Delaware		8051		20-0081662
Clairmont Longview GP, LLC		Delaware		8051		20-0080552
Clairmont Longview, LP		Delaware		8051		20-0081682
Colonial New Braunfels Care Center, LP		Delaware		8051		20-0081694
Colonial New Braunfels GP, LLC		Delaware		8051		20-0080585
Colonial Tyler Care Center, LP		Delaware		8051		20-0081705
Colonial Tyler GP, LLC		Delaware		8051		20-0080596
Comanche Nursing Center GP, LLC		Delaware		8051		20-0080618
Comanche Nursing Center, LP		Delaware		8051		20-0081764
Coronado Nursing Center GP, LLC		Delaware		8051		20-0080630
Coronado Nursing Center, LP		Delaware		8051		20-0081776
Devonshire Care Center, LLC		Delaware		8051		20-0080978
East Walnut Property, LLC		Delaware		8051		20-4214556
Elmcrest Care Center, LLC		Delaware		8051		95-4274740
Eureka Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-0146285
Flatonia Oak Manor GP, LLC		Delaware		8051		20-0080645
Flatonia Oak Manor, LP		Delaware		8051		20-0081788
Fountain Care Center, LLC		Delaware		8051		20-0081005
Fountain Senior Assisted Living, LLC		Delaware		8051		20-0081024
Fountain View Subacute and Nursing Center, LLC		Delaware		8051		95-2506832
Glen Hendren Property, LLC		Delaware		8051		20-4214585
Granada Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-0146353
Guadalupe Valley Nursing Center GP, LLC		Delaware		8051		20-0080693
Guadalupe Valley Nursing Center, LP		Delaware		8051		20-0081801
Hallettsville Rehabilitation and Nursing Center, LP		Delaware		8051		20-0081807
Hallettsville Rehabilitation GP, LLC		Delaware		8051		20-0080721
Hallmark Investment Group, Inc.		Delaware		8051		95-4644786
Hallmark Rehabilitation GP, LLC		Delaware		8051		20-0083989

	(State or Other		(Primary Standard
	Jurisdiction of		Industrial
	Incorporation or		Classification Code		(I.R.S. Employer
(Exact Names of Registrants as Specified in Their Charters)	Organization)		Number)		Identification No.)
Hallmark Rehabilitation, LP		Delaware		8051		20-0084046
Hancock Park Rehabilitation Center, LLC		Delaware		8051		95-3918421
Hancock Park Senior Assisted Living, LLC		Delaware		8051		95-3918420
Hemet Senior Assisted Living, LLC		Delaware		8051		20-0081183
Highland Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854718
Holmesdale Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-4214404
Holmesdale Property, LLC		Delaware		8051		20-4214625
Hospice Care Investments, LLC		Delaware		8051		20-0674503
Hospice Care of the West, LLC		Delaware		8051		20-0662232
Hospice of the West, LP		Delaware		8051		20-1138347
Hospitality Nursing and Rehabilitation Center, LP		Delaware		8051		20-0081818
Hospitality Nursing GP, LLC		Delaware		8051		20-0080750
Leasehold Resource Group, LLC		Delaware		8051		20-0083961
Liberty Terrace Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-4214454
Live Oak Nursing Center GP, LLC		Delaware		8051		20-0080766
Live Oak Nursing Center, LP		Delaware		8051		20-0081828
Louisburg Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854747
Montebello Care Center, LLC		Delaware		8051		20-0081194
Monument Rehabilitation and Nursing Center, LP		Delaware		8051		20-0081831
Monument Rehabilitation GP, LLC		Delaware		8051		20-0080781
Oak Crest Nursing Center GP, LLC		Delaware		8051		20-0080801
Oak Crest Nursing Center, LP		Delaware		8051		20-0081841
Oakland Manor GP, LLC		Delaware		8051		20-0080814
Oakland Manor Nursing Center, LP		Delaware		8051		20-0081854
Pacific Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-0146398
Preferred Design, LLC		Delaware		8051		20-4645757
Richmond Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854787
Rio Hondo Subacute and Nursing Center, LLC		Delaware		8051		95-4274737
Rossville Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854816
Royalwood Care Center, LLC		Delaware		8051		20-0081209
Seaview Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-0146473
Sharon Care Center, LLC		Delaware		8051		20-0081226
Shawnee Gardens Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854845
SHG Resources, LP		Delaware		8051		20-0084078
Skilled Healthcare, LLC		Delaware		8051		20-0084014
Southwest Payroll Services, LLC		Delaware		8051		41-2115227
Southwood Care Center GP, LLC		Delaware		8051		20-0080824
Southwood Care Center, LP		Delaware		8051		20-0081861

	(State or Other		(Primary Standard
	Jurisdiction of		Industrial
	Incorporation or		Classification Code		(I.R.S. Employer
(Exact Names of Registrants as Specified in Their Charters)	Organization)		Number)		Identification No.)
Spring Senior Assisted Living, LLC		Delaware		8051		20-0081045
St. Elizabeth Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1609072
St. Luke Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-0366729
St. Joseph Transitional Rehabilitation Center, LLC		Delaware		8051		20-4974918
Summit Care Corporation		Delaware		8051		95-3656297
Summit Care Pharmacy, Inc.		Delaware		8051		95-3747839
Sycamore Park Care Center, LLC		Delaware		8051		95-2260970
Texas Cityview Care Center GP, LLC		Delaware		8051		20-0080841
Texas Cityview Care Center, LP		Delaware		8051		20-0081871
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC		Delaware		8051		20-0080949
Texas Heritage Oaks Nursing and Rehabilitation Center, LP		Delaware		8051		20-0081888
The Clairmont Tyler GP, LLC		Delaware		8051		20-0080856
The Clairmont Tyler, LP		Delaware		8051		20-0081909
The Earlwood, LLC		Delaware		8051		20-0081060
The Heights of Summerlin, LLC		Delaware		8051		20-1380043
The Woodlands Healthcare Center GP, LLC		Delaware		8051		20-0080888
The Woodlands Healthcare Center, LP		Delaware		8051		20-0081923
Town and Country Manor GP, LLC		Delaware		8051		20-0080866
Town and Country Manor, LP		Delaware		8051		20-0081914
Travelmark Staffing, LLC		Delaware		8051		20-2905079
Travelmark Staffing, LP		Delaware		8051		20-3176804
Valley Healthcare Center, LLC		Delaware		8051		20-0081076
Villa Maria Healthcare Center, LLC		Delaware		8051		20-0081090
Vintage Park at Atchison, LLC		Delaware		8051		20-1854925
Vintage Park at Baldwin City, LLC		Delaware		8051		20-1854971
Vintage Park at Gardner, LLC		Delaware		8051		20-1855022
Vintage Park at Lenexa, LLC		Delaware		8051		20-1855099
Vintage Park at Louisburg, LLC		Delaware		8051		20-1855153
Vintage Park at Osawatomie, LLC		Delaware		8051		20-1855502
Vintage Park at Ottawa, LLC		Delaware		8051		20-1855554
Vintage Park at Paola, LLC		Delaware		8051		20-1855675
Vintage Park at Stanley, LLC		Delaware		8051		20-1855749
Wathena Healthcare and Rehabilitation Center, LLC		Delaware		8051		20-1854880
West Side Campus of Care GP, LLC		Delaware		8051		20-0080879
West Side Campus of Care, LP		Delaware		8051		20-0081918
Willow Creek Healthcare Center, LLC		Delaware		8051		20-0081112
Woodland Care Center, LLC		Delaware		8051		20-0081237

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED OCTOBER 6, 2006

PRELIMINARY PROSPECTUS

Offer to Exchange

$200,000,000 principal amount of our 11% Senior Subordinated Notes due 2014,

which have been registered under the Securities Act,

for any and all of our outstanding unregistered 11% Senior Subordinated Notes due 2014

We are offering to exchange up to $200,000,000 of our 11% Senior Subordinated Notes due 2014, or the “exchange notes,” for our currently outstanding 11% Senior Subordinated Notes due 2014, or the “private notes.” We refer to the private notes and the exchange notes collectively as the “notes.” The exchange notes are substantially identical to the private notes, except that the exchange notes have been registered under the federal securities laws and will not bear any legend restricting their transfer. The exchange notes will represent the same debt as the private notes, and we will issue the exchange notes under the same indenture.

The notes will mature on January 15, 2014. Interest on the notes is paid on January 15 and July 15 of each year.

Prior to January 15, 2010, we may redeem some or all of the notes by paying a make-whole amount as set forth in this prospectus. Thereafter, we may redeem some or all of the notes at the redemption prices set forth herein, plus accrued and unpaid interest to the date of redemption. Additionally, prior to January 15, 2009, we may redeem up to 35% of the notes from the proceeds of certain public equity offerings.

The notes will be our unsecured senior subordinated obligations and will rank junior to all of our existing and future senior indebtedness, including indebtedness under our amended senior secured credit facility. The notes will be guaranteed on a senior subordinated basis by certain of our current and future subsidiaries.

The principal features of the exchange offer are as follows:

•  The exchange offer expires at 5:00 p.m., New York City time, on          , 2006, unless extended.

•  We will exchange all private notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer.

•  You may withdraw tendered private notes at any time prior to the expiration of the exchange offer.

•  The exchange of private notes for exchange notes pursuant to the exchange offer will not be a taxable event to holders for U.S. federal income tax purposes.

•  We will not receive any proceeds from the exchange offer.

•  Our affiliates may not participate in the exchange offer.

•  The exchange offer is not subject to any conditions other than that it not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.

•  The exchange offer is not conditioned upon any minimum principal amount of private notes being tendered for exchange.

•  We do not intend to apply for listing of the exchange notes on any securities exchange or automated quotation system.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. By acknowledging that it will deliver a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for private notes where such private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the completion of the Expiration Date (as defined herein), we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

Investing in the exchange notes involves risks. See “Risk Factors” beginning on page 11.

Neither the U.S. Securities and Exchange Commission nor any other federal or state agency has approved or disapproved of the securities to be distributed in the exchange offer, nor have any of these organizations determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Prospectus is          , 2006.

Table Of Contents

	Page
Forward-Looking Statements		ii
Non-GAAP Financial Measures		iv
Prospectus Summary		1
Risk Factors		11
Use Of Proceeds		30
The Exchange Offer		31
Capitalization		41
Unaudited Pro Forma Consolidated Financial Statements		42
Selected Historical Consolidated Financial Data		46
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations		50
Business And Industry		84
Management		106
Principal Stockholders		115
Certain Relationships And Related Party Transactions		116
Description Of Credit Facility		117
The Transactions		119
Description Of Exchange Notes		121
Certain U.S. Federal Tax Considerations		166
Plan Of Distribution		167
Legal Matters		168
Experts		168
Where You Can Find More Information		168
EXHIBIT 2.1
Exhibit 2.2
Exhibit 2.3
EXHIBIT 3.1
EXHIBIT 3.2
EXHIBIT 3.3
EXHIBIT 3.4
EXHIBIT 3.5
EXHIBIT 3.6
EXHIBIT 3.7
EXHIBIT 3.8
EXHIBIT 3.9
EXHIBIT 3.10
EXHIBIT 3.11
EXHIBIT 3.12
EXHIBIT 3.13
EXHIBIT 3.14
EXHIBIT 3.15
EXHIBIT 3.16
EXHIBIT 3.17
EXHIBIT 3.18
EXHIBIT 3.19
EXHIBIT 3.20
EXHIBIT 3.21
EXHIBIT 3.22
EXHIBIT 3.23
EXHIBIT 3.24
EXHIBIT 3.25
EXHIBIT 3.26
EXHIBIT 3.27
EXHIBIT 3.28
EXHIBIT 3.29
EXHIBIT 3.30
EXHIBIT 3.31
EXHIBIT 3.32
EXHIBIT 3.33
EXHIBIT 3.34
EXHIBIT 3.35
EXHIBIT 3.36
EXHIBIT 3.37
EXHIBIT 3.38
EXHIBIT 3.39
EXHIBIT 3.40
EXHIBIT 3.41
EXHIBIT 3.42
EXHIBIT 3.43
EXHIBIT 3.44
EXHIBIT 3.45
EXHIBIT 3.46
EXHIBIT 3.47
EXHIBIT 3.48
EXHIBIT 3.49
EXHIBIT 3.50
EXHIBIT 3.51
EXHIBIT 3.52
EXHIBIT 3.53
EXHIBIT 3.54
EXHIBIT 3.55
EXHIBIT 3.56
EXHIBIT 3.57
EXHIBIT 3.58
EXHIBIT 3.59
EXHIBIT 3.60
EXHIBIT 3.61
EXHIBIT 3.62
EXHIBIT 3.63
EXHIBIT 3.64
EXHIBIT 3.65
EXHIBIT 3.66
EXHIBIT 3.67
EXHIBIT 3.68
EXHIBIT 3.69
EXHIBIT 3.70
EXHIBIT 3.71
EXHIBIT 3.72
EXHIBIT 3.73
EXHIBIT 3.74
EXHIBIT 3.75
EXHIBIT 3.76
EXHIBIT 3.77
EXHIBIT 3.78
EXHIBIT 3.79
EXHIBIT 3.80
EXHIBIT 3.81
EXHIBIT 3.82
EXHIBIT 3.83
EXHIBIT 3.84
EXHIBIT 3.85
EXHIBIT 3.86
EXHIBIT 3.87
EXHIBIT 3.88
EXHIBIT 3.89
EXHIBIT 3.90
EXHIBIT 3.91
EXHIBIT 3.92
EXHIBIT 3.93
EXHIBIT 3.94
EXHIBIT 3.95
EXHIBIT 3.96
EXHIBIT 3.97
EXHIBIT 3.98
EXHIBIT 3.99
EXHIBIT 3.100
EXHIBIT 3.101
EXHIBIT 3.102
EXHIBIT 3.103
EXHIBIT 3.104
EXHIBIT 3.105
EXHIBIT 3.106
EXHIBIT 3.107
EXHIBIT 3.108
EXHIBIT 3.109
EXHIBIT 3.110
EXHIBIT 3.111
EXHIBIT 3.112
EXHIBIT 3.113
EXHIBIT 3.114
EXHIBIT 3.115
EXHIBIT 3.116
EXHIBIT 3.117
EXHIBIT 3.118
EXHIBIT 3.119
EXHIBIT 3.120
EXHIBIT 3.121
EXHIBIT 3.122
EXHIBIT 3.123
EXHIBIT 3.124
EXHIBIT 3.125
EXHIBIT 3.126
EXHIBIT 3.127
EXHIBIT 3.128
EXHIBIT 3.129
EXHIBIT 3.130
EXHIBIT 3.131
EXHIBIT 3.132
EXHIBIT 3.133
EXHIBIT 3.134
EXHIBIT 3.135
EXHIBIT 3.136
EXHIBIT 3.137
EXHIBIT 3.138
EXHIBIT 3.139
EXHIBIT 3.140
EXHIBIT 3.141
EXHIBIT 3.142
EXHIBIT 3.143
EXHIBIT 3.144
EXHIBIT 3.145
EXHIBIT 3.146
EXHIBIT 3.147
EXHIBIT 3.148
EXHIBIT 3.149
EXHIBIT 3.150
EXHIBIT 3.151
EXHIBIT 3.152
EXHIBIT 3.153
EXHIBIT 3.154
EXHIBIT 3.155
EXHIBIT 3.156
EXHIBIT 3.157
EXHIBIT 3.158
EXHIBIT 3.159
EXHIBIT 3.160
EXHIBIT 3.161
EXHIBIT 3.162
EXHIBIT 3.163
EXHIBIT 3.164
EXHIBIT 3.165
EXHIBIT 3.166
EXHIBIT 3.167
EXHIBIT 3.168
EXHIBIT 3.169
EXHIBIT 3.170
EXHIBIT 3.171
EXHIBIT 3.172
EXHIBIT 3.173
EXHIBIT 3.174
EXHIBIT 3.175
EXHIBIT 3.176
EXHIBIT 3.177
EXHIBIT 3.178
EXHIBIT 3.179
EXHIBIT 3.180
EXHIBIT 3.181
EXHIBIT 3.182
EXHIBIT 3.183
EXHIBIT 3.184
EXHIBIT 3.185
EXHIBIT 3.187
EXHIBIT 3.188
EXHIBIT 3.189
EXHIBIT 3.190
EXHIBIT 3.191
EXHIBIT 3.192
EXHIBIT 3.193
EXHIBIT 3.194
EXHIBIT 3.195
EXHIBIT 3.196
EXHIBIT 3.197
EXHIBIT 3.198
EXHIBIT 3.199
EXHIBIT 3.200
EXHIBIT 3.201
EXHIBIT 3.202
EXHIBIT 3.203
EXHIBIT 3.204
EXHIBIT 3.205
EXHIBIT 3.206
EXHIBIT 3.207
EXHIBIT 3.208
EXHIBIT 3.209
EXHIBIT 3.210
EXHIBIT 3.211
EXHIBIT 3.212
EXHIBIT 3.213
EXHIBIT 3.214
EXHIBIT 3.215
EXHIBIT 3.216
Exhibit 3.217
Exhibit 3.218
Exhibit 3.219
Exhibit 3.220
Exhibit 3.221
Exhibit 3.222
Exhibit 3.223
Exhibit 3.224
Exhibit 3.225
Exhibit 3.226
Exhibit 3.227
Exhibit 3.228
Exhibit 3.229
Exhibit 3.230
Exhibit 3.231
Exhibit 3.232
EXHIBIT 4.1
Exhibit 4.3
EXHIBIT 5.1
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 10.6
EXHIBIT 10.7
EXHIBIT 10.8
Exhibit 10.9
Exhibit 10.10
Exhibit 10.11
EXHIBIT 12.1
EXHIBIT 21.1
Exhibit 23.2

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained in this prospectus. You must not rely upon any information or representation not contained in this prospectus as if we had authorized it. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or a solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

Industry and Market Data

Industry and market data used throughout this prospectus were obtained from the U.S. Census Bureau, the Centers for Medicare and Medicaid Services, AON Risk Consultants, American Health Care Association and other sources we believe to be reliable. While we believe that these studies and reports and our own research and estimates are reliable and appropriate, we have not independently verified such data and we do not make any representation as to the accuracy of such information.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words, “anticipates,” “plans,” “expects,” “estimates,” “assumes,” “could,” “projects,” “intends,” “may,” “continue” or the negative of these and similar expressions are intended to identify forward-looking statements. Examples of such forward-looking statements include our expectations with respect to our strategy, expansion opportunities, extension of our business model and future growth. These forward-looking statements are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and management’s assumptions. We believe that our expectations are based upon reasonable beliefs, assumptions and information available to our management at the time the statements are made, however, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Numerous factors may affect our actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on our behalf. Factors that may cause such differences include, among others:

•  changes in Medicare and Medicaid payment levels and methodologies, including annual therapy caps, and the application of such methodologies by the government and its fiscal intermediaries;

•  the effect of government regulations and changes in regulations governing the healthcare industry, including our compliance with such regulations;

•  periodic reviews, audits and investigations by federal and state agencies;

•  our ability to obtain and maintain individual state facility licenses to operate;

•  changes in, or the failure to comply with, regulations governing the transmission and privacy of health information;

•  pending or threatened litigation and professional liability claims;

•  national and local economic conditions, including their effect on the availability and cost of labor, utilities and materials;

•  future cost containment initiatives by third-party payors;

•  demographic changes and changes in payor mix and payment methodologies;

•  our ability to attract and retain qualified personnel;

•  our ability to maintain and increase census (volume of residents) levels;

•  the competitive environment in which we operate;

•  our ability to obtain adequate insurance coverage with financially viable insurance carriers, as well as the ability of our insurance carriers to fulfill their obligations;

•  changes in the current trends in the costs and volume of patient-care related claims, workers’ compensation claims and insurance costs related to such claims;

•  our ability to maintain good relationships with referral sources;

•  further consolidation in the industry in which we operate;

•  liquidity concerns, including as a result of delays in reimbursement;

•  our ability to integrate acquisitions and realize synergies and accretion;

•  our ability to manage growth effectively;

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•  the failure to comply with environmental and occupational health and safety regulations;

•  unionization, work stoppages or slowdowns;

•  acts of God or public authorities, war, civil unrest, terrorism, fire, floods, earthquakes and other matters beyond our control;

•  our existing and future debt, which may affect our ability to obtain financing in the future or to comply with our existing debt covenants;

•  our ability to improve our fundamental business processes and reduce costs throughout the organization; and

•  the availability and terms of capital to fund acquisitions, capital expenditures and ongoing operations.

The foregoing factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could materially affect our business. For additional information regarding factors that may cause our results of operations to differ materially from those presented herein, please see “Risk Factors” contained in this prospectus. Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in this prospectus. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events, except as may be required under applicable securities law.

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NON-GAAP FINANCIAL MEASURES

EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. generally accepted accounting principles, or GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as measures of our liquidity. We believe that the presentation of EBITDA and Adjusted EBITDA provide useful information to investors regarding our operational performance because they are useful for trending, analyzing and benchmarking the performance of our business. The credit agreement governing our amended senior secured term loan and the indenture governing our the notes each use a measure substantially similar to Adjusted EBITDA as the basis for calculating certain financial ratios used in covenants set forth in those agreements and in determining the interest rate of our first lien term loan. We use EBITDA and Adjusted EBITDA primarily as performance measures and believe that the GAAP financial measure most directly comparable to EBITDA and Adjusted EBITDA is net income (loss) from continuing operations before the cumulative effect of a change in accounting principle.

We also use EBITDA and Adjusted EBITDA as measures to assess the relative performance of our business units. EBITDA and Adjusted EBITDA are useful in this regard because they do not include such costs as interest expense, income taxes, depreciation and amortization expense and special charges, which may vary from business unit to business unit depending upon various factors, including the method used to finance the original purchase of the business unit or the tax law of the state in which a business unit operates. By excluding such factors when measuring financial performance, management is better able to evaluate operating performance of the business unit. We also use EBITDA and Adjusted EBITDA in our annual budget process, in the allocation of resources and to design incentive compensation for management.

In addition, in evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses such as the expenses added back in calculating such measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Our EBITDA and Adjusted EBITDA measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•  they do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•  they do not reflect changes in, or cash requirements for, our working capital needs;

•  they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

•  they do not reflect any income tax payments we may be required to make;

•  although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

•  they are not adjusted for all non-cash income or expense items that are reflected in our consolidated statements of cash flows;

•  they do not reflect the impact on earnings of charges resulting from certain matters we consider not to be indicative of our on-going operations; and

•  other companies in our industry may calculate these measures differently than we do, which limits their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See our Consolidated Statements of Cash Flows included elsewhere in this prospectus.

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PROSPECTUS SUMMARY

This summary highlights certain information about us and the offering. This summary is not comprehensive and does not contain all of the information that may be important to you. You should read the entire prospectus, including “Risk Factors”, the financial statements and related notes before making an investment decision. References in this prospectus to “we”, “us” and “our” refer to Skilled Healthcare Group, Inc. and its subsidiaries, unless the context indicates otherwise.

	Terms of the Exchange Offer
Securities Offered	$200,000,000 in aggregate principal amount of 11% Senior Subordinated Notes due 2014.
Exchange Offer	We are offering to exchange our exchange notes for our private notes properly tendered and accepted. You may tender private notes only in denominations of $2,000 and any greater integral multiples of $1,000. We will issue the exchange notes on or promptly after the date that the exchange offer expires. As of the date of this prospectus, $200,000,000 in aggregate principal amount of private notes are outstanding.
Transferability of Exchange Notes	We believe that you will be able to freely transfer the exchange notes without registration or any prospectus delivery requirement so long as you may accurately make the representations listed under “The Exchange Offer — Resale of the Exchange Notes.”
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on          , 2006, unless extended, in which case the expiration date will mean the latest date and time to which we extend the exchange offer.
Conditions to the Exchange Offer	The exchange offer is not subject to any conditions other than that it not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission. The exchange offer is not conditioned upon any minimum principal amount of private notes being tendered for exchange.
Procedures for Tendering Notes	If you wish to tender your private notes for exchange notes pursuant to the exchange offer you must transmit to Wells Fargo Bank National Association, as exchange agent, prior to 5:00 p.m., New York City time, on the expiration date, an agent’s message, transmitted by a book-entry transfer facility. In addition, the exchange agent must receive a timely confirmation of book-entry transfer of the private notes into the exchange agent’s account at The Depository Trust Company, or DTC, under the procedures for book-entry transfers described under “The Exchange Offer — Procedures for Tendering.”
	The private notes must be tendered by electronic transmission of acceptance through DTC’s Automated Tender Offer Program system, which we refer to as ATOP, procedures for transfer. Please carefully follow the instructions contained in this prospectus on how to tender your private notes. By tendering your private notes in the exchange offer, you will make the representations to us described under “The Exchange Offer — Procedures for Tendering.”

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Acceptance and Delivery	Subject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all private notes which are validly tendered in the exchange offer and not withdrawn before 5:00 p.m., New York City time, on the expiration date.
Withdrawal Rights	You may withdraw the tender of your private notes at any time before 5:00 p.m., New York City time, on the expiration date, by complying with the procedures for withdrawal described in this prospectus under the heading “The Exchange Offer — Withdrawal of Tenders.”
Consequences of Failure to Exchange	If you do not exchange your private notes for exchange notes, you will continue to be subject to the restrictions on transfer provided in the private notes and in the indenture governing the private notes. In general, the private notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently plan to register the private notes under the Securities Act.
Federal Income Tax Consequences	The exchange of private notes for exchange notes in the exchange offer will not be a taxable event to holders for U.S. federal income tax purposes. See “Certain U.S. Federal Tax Considerations.”
Exchange Agent	Wells Fargo Bank National Association, the trustee under the indenture governing the private notes, is serving as the exchange agent.
Registration Rights Agreement	You are entitled to exchange your private notes for exchange notes with substantially identical terms pursuant to the registration rights agreement. The exchange offer satisfies our obligation to provide the exchange notes in accordance with the registration rights agreement. After the exchange offer is completed, you will no longer be entitled to any exchange or registration rights with respect to your private notes. Under the circumstances described in the registration rights agreement, you may require us to file a shelf registration statement under the Securities Act.
Broker-Dealer	Each broker-dealer that receives exchange notes for its own account in exchange for private notes, where such private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”

We explain the exchange offer in greater detail beginning on page 31.

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	Terms of the Exchange Notes
Issuer	Skilled Healthcare Group, Inc.
Notes Offered	$200,000,000 in aggregate principal amount of 11% Senior Subordinated Notes due 2014.
Maturity Date	January 15, 2014.
Interest	11% per annum, payable semi-annually in arrears on January 15 and July 15.
Optional Redemption	We may redeem some or all of the notes at any time prior to January 15, 2010 at a price equal to 100% of the principal amount plus accrued and unpaid interest plus a “make-whole” premium as set forth under “Description of Notes — Optional Redemption.” We also may redeem some or all of the notes at any time and from time to time on or after January 15, 2010, at the redemption prices set forth under “Description of Notes — Optional Redemption” plus accrued and unpaid interest to the date of redemption. In addition, at any time prior to January 15, 2009, we may redeem up to 35% of the notes with the proceeds of certain public equity offerings.
Change of Control	If a change of control occurs, subject to certain conditions, we must give holders of the notes an opportunity to sell to us the notes at a purchase price of 101% of the principal amount of the notes, plus accrued and unpaid interest to the date of purchase. See “Description of Notes — Change of Control.”
Guarantees	The notes will be guaranteed, jointly and severally and on an unsecured senior subordinated basis, subject to certain exceptions, by all of our existing and future domestic subsidiaries other than our 50% owned pharmacy joint venture. The notes will not be guaranteed by our off-shore captive insurance subsidiary.
Ranking	The notes and the guarantees will be our unsecured senior subordinated obligations and rank:
	• junior to all of our and the guarantors’ existing and future senior indebtedness, including indebtedness under our amended senior secured credit facility;
	• equally with any of our and the guarantors’ future senior subordinated indebtedness; and
	• senior to any of our and the guarantors’ future subordinated indebtedness.
	In addition, the notes will be structurally subordinated to all of the existing and future liabilities of our subsidiaries and our pharmacy joint venture that do not guarantee the notes.
	As of June 30, 2006, we and our guarantors had outstanding:
	• $263.1 million of senior indebtedness, all of which was secured;
	• $198.8 million of senior subordinated indebtedness, consisting of the notes; and
	• no subordinated indebtedness.

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	In addition, as of June 30, 2006, our off-shore captive insurance subsidiary and our pharmacy joint venture that will not guarantee the notes had approximately $6.5 million of aggregate consolidated liabilities, excluding liabilities owing to the Company or any guarantor.
Certain Covenants	The indenture governing the notes contains covenants that, among other things, limits our ability and the ability of our restricted subsidiaries to:
	• incur, assume or guarantee additional indebtedness or issue preferred stock;
	• pay dividends or make other equity distributions to our stockholders;
	• purchase or redeem our capital stock;
	• make certain investments;
	• enter into arrangements that restrict dividends or other payments to us from our restricted subsidiaries;
	• sell or otherwise dispose of assets;
	• engage in transactions with our affiliates; and
	• merge or consolidate with another entity.
	The limitations are subject to a number of important qualifications and exceptions. See “Description of Exchange Notes — Certain Covenants.”

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Our Company

We are a leading provider of integrated long-term healthcare services through our skilled nursing facilities and rehabilitation therapy business. We also provide other related healthcare services, including assisted living care and hospice care. We focus on providing high-quality care to our patients, and we have a strong reputation for treating patients who require a high level of skilled nursing care and extensive rehabilitation therapy, whom we refer to as high-acuity patients. As of June 30, 2006, we owned or leased 60 skilled nursing facilities and 12 assisted living facilities, together comprising approximately 8,300 licensed beds. Our facilities, approximately 72% of which we own, are located in California, Texas, Kansas, Missouri and Nevada and are generally clustered in large urban or suburban markets. For the year ended December 31, 2005 and the six months ended June 30, 2006, our skilled nursing facilities, including our integrated rehabilitation therapy services at these facilities, generated approximately 86.8% and 85.9%, respectively, of our revenue with the remainder generated by our other related healthcare services.

In 2005 and the first six months of 2006, our revenue was $462.8 million and $256.4 million, respectively. To increase our revenue we focus on improving our skilled mix, which is the percentage of our patient population that is eligible to receive Medicare and managed care reimbursements. Medicare and managed care payors typically provide higher reimbursement than other payors because patients in these programs typically require a greater level of care and service. We have increased our skilled mix from 19.1% for 2003 to 24.0% for the first six months of 2006. Our high skilled mix also results in a high quality mix, which is our percentage of non-Medicaid revenues. We have increased our quality mix from 58.8% for 2003 to 68.4% for the first six months of 2006. In 2005, our net income before the cumulative effect of a change in accounting principle was $35.6 million, our EBITDA was $44.4 million and our Adjusted EBITDA was $78.6 million. In the first six months of 2006, our net income was $7.8 million and our EBITDA and Adjusted EBITDA were each $42.9 million. We define EBITDA and Adjusted EBITDA and provide a reconciliation of EBITDA and Adjusted EBITDA to net income from continuing operations before the cumulative effect of a change in accounting principle (the most directly comparable financial measure presented in accordance with generally accepted accounting principles) in footnote 2 to “Selected Consolidated Financial Data.” See “Non-GAAP Financial Measures” for a description of our uses of, and the limitations associated with the use of, EBITDA and Adjusted EBITDA.

Our Competitive Strengths

We believe the following strengths serve as a foundation for our strategy:

•  High-quality patient care and integrated service offerings.  Through our dedicated and well-trained employees, attractive facility environment and broad service offering, we believe that we provide high-quality, cost-effective care to our patients. We believe that our integrated skilled nursing care and rehabilitation therapy service offerings are particularly attractive to high-acuity patients who require more intensive and medically complex care. We enhanced our position as a select provider to high-acuity patients by introducing our Express Recovery^tm program, which uses a dedicated unit within a skilled nursing facility to deliver a comprehensive rehabilitation regime to high-acuity patients.

•  Strong reputation in local markets.  We believe we have a strong reputation for high-quality care and successful clinical outcomes in our local markets. We believe this reputation has enabled us to build strong relationships with managed care payors, as well as referral sources such as hospitals and specialty physicians that frequently refer high-acuity patients to us.

•  Concentrated network in attractive markets.  Approximately 67% of our skilled nursing facilities are located in urban or suburban markets. Many of our facilities are located in close proximity to large medical centers and specialty physician groups, allowing us to develop relationships with these key referral sources and increase the number of high-acuity patients referred to us. We believe that managed care payors typically prefer a regional network of facilities such as ours because they prefer to contract with a limited number of providers. In addition, our clustered facility locations have enabled us to achieve lower operating costs through flexible sharing of therapists and nurses among

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facilities, reduced third-party contract labor and the placement of experienced managers in close proximity to our facilities.

•  Successful integration of acquisitions.  Since August 2003 we have acquired or entered into long-term leases for 26 skilled nursing and assisted living facilities across four states. We have successfully integrated these facilities and have experienced average facility level margin improvement of 2.6% and an increase in skilled mix of 2.4% for the 21 of these facilities acquired before 2006, as measured by the first three full months immediately following each acquisition relative to the comparative period one year later.

•  Significant facility ownership.  As of June 30, 2006, we owned approximately 72% of our facilities. Ownership provides us with greater operating and financial flexibility than leasing because it provides longer term control over facility operations, mitigates our exposure to increasing rent expense and allows us to respond more quickly and efficiently to changes in market demand through facility renovations and modifications.

•  Strong and experienced management team.  Our senior management team has an average of more than 23 years of healthcare industry experience and has made significant financial and operating improvements since joining us in 2002. By establishing our focus on key performance metrics and creating a culture of accountability across all of our facilities, our senior management team has developed a framework for monitoring and improving quality of care and profitability.

Our Strategy

The primary elements of our business strategy are to:

•  Focus on high-acuity patients.  We focus on attracting high-acuity patients, for whom we are reimbursed at higher rates. We believe that we can continue to leverage our integrated service offering and our reputation for providing high-quality care to expand our referral network and increase the number of high-acuity patients referred to us. In addition, we intend to introduce our Express Recovery^tm program in more of our facilities and to develop other innovative programs to better serve high-acuity patients.

•  Expand our rehabilitation and other related healthcare businesses.  We intend to continue to grow our rehabilitation therapy and hospice care businesses by expanding their use in both our own and in third-party facilities and by adding new third-party contracts. We believe that by continuing to grow these businesses and adding to our portfolio of related healthcare services, we will be able to capture a greater share of healthcare expenditures in our key markets.

•  Drive revenue growth organically and through acquisitions and development.  We pursue organic revenue growth by expanding our referral network, increasing our service offerings to high-acuity patients and expanding our other related healthcare services offerings. We regularly evaluate strategic acquisitions and new development opportunities in attractive markets, particularly in the western region of the United States, that allow us to build relationships with additional referral sources, such as hospitals, specialty physicians and managed care organizations, or achieve operational efficiencies.

•  Monitor performance measures to increase operating efficiency.  We focus on reducing operating costs by maximizing the efficient use of our labor resources and managing our insurance and professional and general liability and workers’ compensation expenses. We have had success with these initiatives in part by implementing systems to monitor closely key metrics that measure our performance in such areas as quality of care, occupancy, payor mix, labor utilization and turnover and insurance claims. We believe that by continuing to monitor our performance closely we will be able to reduce our use of outsourced services and our overtime compensation and proactively address potential sources of medical malpractice and workers’ compensation exposure, all of which would enable us to improve our operating results.

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•  Attract and retain talented and qualified employees.  We seek to hire and retain talented and qualified employees, including our administrative and management personnel. We also seek to leverage our employees’ capabilities through our culture, quality of care training and incentive programs in order to enhance our ability to provide quality clinical and rehabilitation services.

Our Industry

We operate in the over $120 billion United States nursing home market through the operation of our skilled nursing and assisted living facilities. The nursing home market is highly fragmented, and according to the American Health Care Association, comprises approximately 16,000 facilities with approximately 1.7 million licensed beds as of June 2006. As of December 31, 2005, the five largest long-term healthcare companies combined controlled approximately 10% of these facilities. We believe the key underlying trends within the industry are described below.

•  Demand driven by aging population and increased life expectancies.  We believe that demand for long-term healthcare services will continue to grow due to an aging population and increased life expectancies. According to the U.S. Census Bureau, the number of Americans aged 65 or older is expected to increase from approximately 37 million in 2005 to approximately 40 million in 2010 and to approximately 47 million in 2015, representing average annual growth from 2005 of 1.9% and 2.5%, respectively.

•  Shift of patient care to lower cost alternatives.  We expect that the growth of the elderly population in the United States will continue to cause healthcare costs to increase at a faster rate than the available funding from government-sponsored healthcare programs. In response, the federal government has adopted cost containment measures that encourage the treatment of patients in more cost effective settings such as skilled nursing facilities, for which the staffing requirements and associated costs are often significantly lower than at short or long-term acute-care hospitals, in-patient rehabilitation facilities or other post-acute care settings. As a result, we believe that many high-acuity patients that would have been previously treated in these facilities are increasingly being cared for in skilled nursing facilities.

•  Supply/Demand imbalance.  According to the AARP Public Policy Institute, the 65 or older population in California and Texas is expected to grow from 2002 to 2020 by 79.5% and 74.6%, respectively, compared to the national average growth of 58.4% over this same period. We expect that this growth in the elderly population will result in increased demand for services provided by long-term healthcare facilities in the United States, including skilled nursing facilities, assisted living facilities and in-patient rehabilitation facilities. Despite this projected growth in demand for long-term healthcare services, there has been a decline in the number of nursing facility beds. According to the American Health Care Association, the total number of nursing facility beds in the United States has declined from approximately 1.8 million in December 2001 to approximately 1.7 million in June 2006, we believe in part due to the migration of lower-acuity patients to alternative sources of long-term care. This supply/demand imbalance is also highlighted in our key states, with the number of nursing facility beds in California declining from 2001 to 2006 by 5.9% and remaining relatively flat in Texas over such period.

•  Medicare reimbursement.  Medicare is a federal program and provides certain healthcare benefits to beneficiaries who are 65 years of age or older, blind, disabled or qualify for the End Stage Renal Disease Program. Since 1999, Medicare has reimbursed our skilled nursing facilities at a predetermined rate, based on the anticipated costs of treating patients. Under this system, reimbursement rates are determined by classifying each patient into a resource utilization group, or RUG, category that is based upon each patient’s acuity level. Between 1999 and 2003, Congress enacted a series of temporary supplemental payments and adjustments to respond to financial pressures placed on the nursing home industry. Effective January 1, 2006, the last of the previously established temporary payments applicable to our patient population expired. At that time, the Center for Medicare and

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Medicaid Services increased the number of RUG categories from 44 to 53 and refined the reimbursement rates for the existing RUG categories in order to better align the respective payments with patient acuity levels. These nine new RUG categories generally apply to higher acuity patients, and the higher reimbursement rates for those RUGs have been adopted to better account for the higher costs of those patients. As part of a market basket adjustment implemented for increased cost of living, Medicare payments to skilled nursing facilities increased by an average of 3.1% for 2006 and will also increase by an average of 3.1% for 2007.

On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005, or DRA, which will reduce net Medicare and Medicaid spending by approximately $11 billion over five years. Under the previously enacted federal law, caps on annual reimbursement for rehabilitation therapy became effective on January 1, 2006. The DRA provides for exceptions to those caps for patients with certain conditions or multiple complexities whose therapy is reimbursed under Medicare Part B and provided in 2006. The majority of the residents in our skilled nursing facilities and patients served by our rehabilitation therapy programs whose therapy is reimbursed under Medicare Part B have qualified for these exceptions to these reimbursement caps. Unless extended, these exceptions will expire on December 31, 2006. In addition, on February 6, 2006, the Bush Administration released its fiscal year 2007 budget proposal, which would reduce Medicare spending by $2.5 billion in fiscal year 2007 and $35.9 billion over five years. The budget would freeze payments in fiscal year 2007 to skilled nursing facilities and reduce payment updates for hospice services. To date, congressional resolutions have not included these reimbursement cuts, and these proposals would require legislation to be implemented. For a more detailed description of these proposed provisions, see “Business — Sources of Reimbursement.”

•  Medicaid reimbursement.  Medicaid is a state-administered medical assistance program for the indigent, operated by individual states with the financial participation of the federal government. All states in which we operate reimburse long-term care services for individuals who are Medicaid eligible and qualify for institutional care. Medicaid reimbursement rates are generally lower than reimbursement provided by Medicare. Rapidly increasing Medicaid spending, combined with slower state revenue growth, has led many states to institute measures aimed at controlling spending growth. Given that Medicaid outlays are a significant component of state budgets, we expect continuing cost containment pressures on Medicaid outlays for skilled nursing facilities in the states in which we operate. In addition, the DRA limited the circumstances under which an individual may become financially eligible for nursing home services under Medicaid. While Medicaid spending varies by state, we believe the states in which we operate generally provide a favorable operating environment.

The U.S. Department of Health and Human Services has established a Medicaid advisory commission charged with recommending ways in which Congress can restructure the program and reduce Medicaid spending growth by up to $10 billion over five years. The commission is expected to issue its report by December 31, 2006.

•  Tort reform.  In response to the growing cost of medical malpractice claims, many states, including California and Texas have implemented tort reform measures capping non-economic damages in many cases and limiting certain punitive damages. These caps both limit exposure to claims and serve to expedite resolution of claims.

Recent Transactions

On June 16, 2006, we purchased a long-term leasehold interest in a skilled nursing facility in Las Vegas, Nevada for $2.7 million in cash and on March 1, 2006, we purchased two skilled nursing facilities and one skilled nursing and residential care facility in Missouri for $31.0 million in cash. These facilities added approximately 543 beds to our operations.

In December 2005, Onex Partners LP and Onex Corporation, together Onex, certain members of our management and Baylor Healthcare System, together the rollover investors, and other associates of Onex purchased our business in a merger for $645.7 million. Onex and the rollover investors funded the purchase

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price, related transaction costs and an increase of cash on our balance sheet with equity contributions of approximately $222.9 million, the issuance and sale of $200.0 million principal amount of our 11% senior subordinated notes and the incurrence and assumption of $259.4 million in term loan debt. As a result of the merger, we became a wholly-owned subsidiary of SHG Holding Solutions, Inc., or SHG Holding, and Onex, its affiliates and associates, and the rollover investors held approximately 95% and 5%, respectively, of the outstanding capital stock of SHG Holding, not including the restricted stock issued to management at the time of the Transactions.

We refer to the merger, the equity contributions, the financings and use of proceeds therefrom and related transactions, collectively, as the “Transactions.” We describe the Transactions in greater detail under “The Transactions.”

Our Sponsor

Onex Corporation is one of Canada’s largest companies, with global operations in the services, manufacturing and technology industries. Onex invests in companies across all industries, primarily in North America, and specializes in partnering with management teams to build industry-leading businesses. Since 2004, Onex investments in large-cap companies have been completed with funding from Onex Partners LP, Onex’s US$1.7 billion private equity fund. Onex and Onex Partners have invested in more than 150 companies since 1983. Since early 2004, Onex has made several investments in healthcare service companies including Emergency Medical Services Corporation, Res-Care, Inc., Center for Diagnostic Imaging, Inc. and Magellan Health Services, Inc. In other industries, Onex and Onex Partners have made investments in companies that include Spirit AeroSystems, Inc., Celestica, Inc., Cineplex Entertainment LP and ClientLogic Corporation.

Corporate Information

We were incorporated in the State of Delaware. Our principal corporate offices are located at 27442 Portola Parkway, Suite 200, Foothill Ranch, CA 92610. Our telephone number is (949) 282-5800. Our website address is www.skilledhealthcaregroup.com. The content of our website does not constitute a part of this prospectus.

Trademarks And Trade Names

We own or have rights to use certain trademarks or trade names that we use in conjunction with the operations of our business, including, without limitation, each of the following: Express Recovery^tm, Hospice Care of the West, and Skilled Healthcare.

Risk Factors

Investing in the notes involves substantial risk. See “Risk Factors” for a discussion of certain factors that you should consider before investing in the notes.

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Ratio of Earnings to Fixed Charges

													Six Months Ended
	Year Ended December 31,												June 30,
	2001		2002		2003		2004			2005			2005		2006
Ratio of earnings to fixed charges		—		—		—		1.63	x		1.20	x		1.46x		1.52x

For the purpose of calculating the ratio of earnings to fixed charges, earnings represents income (loss) from continuing operations before income taxes and before cumulative effect of a change in accounting principle plus fixed charges. Fixed charges consist of interest expense (including capitalized interest, if any) on all indebtedness plus amortization of debt issuance costs and the portion of rental expense that we believe is representative of the interest component of rental expense. Earnings were insufficient to cover fixed charges in 2001, 2002 and 2003 by $143.9 million, $2.1 million and $5.3 million, respectively.

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RISK FACTORS

You should carefully consider the risk factors set forth below as well as the other information contained in this prospectus before purchasing the notes. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Some of the statements in “Risk Factors” are forward-looking statements. For more information about forward-looking statements, please see “Forward-Looking Statements.”

Risk Factors Related to the Notes

Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the notes.

We have a significant amount of indebtedness. On June 30, 2006, our total indebtedness was $461.9 million (of which $198.8 million consisted of senior debt).

Our substantial indebtedness could have important consequences to you. For example, it could:

•  make it difficult for us to satisfy our obligations with respect to these notes;

•  increase our vulnerability to adverse economic and industry conditions;

•  require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;

•  limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•  place us at a competitive disadvantage compared to our competitors that have less debt;

•  increase the cost or limit the availability of additional financing, if needed or desired, to fund future working capital, capital expenditures and other general corporate requirements, or to carry out other aspects of our business plan;

•  require us to maintain debt coverage and financial ratios at specified levels, reducing our financial flexibility; and

•  limit our ability to make material acquisitions or take advantage of business opportunities that may arise.

Despite our substantial indebtedness, we may still be able to incur more debt. This could intensify the risks associated with this indebtedness.

The terms of the indenture governing the notes and our amended senior secured credit facility contain restrictions on our ability to incur additional indebtedness. These restrictions are subject to a number of important qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. Accordingly, we could incur significant additional indebtedness in the future, all of which could constitute senior indebtedness for purposes of the notes. As of June 30, we had $70.8 million available for additional borrowing under our amended senior secured credit facility. The more we become leveraged, the more we, and in turn the holders of the notes, become exposed to the risks described above under “— Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the notes.”

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The agreements that govern our amended senior secured credit facility and the notes, contain various covenants that limit our discretion in the operation of our business.

The agreements and instruments that govern both our amended senior secured credit facility and the notes contain various restrictive covenants that, among other things, restrict our ability to:

•  incur more debt;

•  pay dividends, purchase company stock or make other distributions;

•  make certain investments;

•  create certain liens;

•  enter into transactions with affiliates;

•  make acquisitions;

•  merge or consolidate; and

•  transfer or sell assets.

In addition, the amended senior secured credit facility contains covenants that require us to achieve and maintain certain financial tests or ratios, including some that become more restrictive over time.

Our ability to comply with these covenants is subject to various risks and uncertainties. In addition, events beyond our control could affect our ability to comply with these covenants. A failure to comply with these covenants could result in an event of default under our amended senior secured credit facility, which, if not cured or waived, could have a material adverse affect on our business, financial condition and results of operations. In the event of any default under our amended senior secured credit facility, the lenders thereunder:

•  will not be required to lend any additional amounts to us;

•  could elect to declare all of our outstanding borrowings, together with accrued and unpaid interest and fees, to be immediately due and payable; and

•  could prevent us from making debt service payments on the notes pursuant to the subordination provisions applicable to the notes, which actions could result in an event of default under the notes.

If we were unable to repay debt to our secured lenders, these lenders could also proceed against the collateral securing that debt. Even if we are able to comply with all applicable covenants, the restrictions on our ability to manage our business in our sole discretion could harm our business by, among other things, limiting our ability to take advantage of financings, investments, acquisitions and other corporate transactions that may be beneficial to us.

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness, including the notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future. Our ratio of earnings to fixed charges was 1.20 for the year ended December 31, 2005 and 1.52 for the six months ended June 30, 2006. Our ability to generate sufficient cash to service our debt is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our amended senior secured credit facility in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the notes on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our amended senior secured credit facility and these notes, on commercially reasonable terms or at all.

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Your right to receive payments on the notes is junior to our existing indebtedness and possibly all of our future borrowings.

The notes rank behind all of our existing indebtedness and all of our future borrowings, except any future indebtedness that expressly provides that it ranks equal with, or subordinated in right of payment to, the notes. As a result, upon any distribution to our creditors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or our property, the holders of our senior debt will be entitled to be paid in full and before any payment may be made with respect to the notes.

In addition, all payments on the notes will be blocked in the event of a payment default on certain senior debt and may be blocked for up to 179 consecutive days in the event of certain non-payment defaults on certain senior debt.

In addition to being contractually subordinated to all existing and future senior indebtedness, our obligations under the notes will be unsecured while obligations under our amended senior secured credit facility are secured by substantially all of our assets and those of our subsidiaries. If we become insolvent thereunder or are liquidated, or if payment under our amended senior secured credit facility is accelerated, the lenders will have a claim on all of our assets before the holders of unsecured debt, including the notes.

In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to us, holders of the notes will participate with trade creditors and all other holders of our subordinated indebtedness in the assets remaining after we have paid all of our senior debt. However, because the indenture requires that amounts otherwise payable to holders of the notes in a bankruptcy or similar proceeding be paid to holders of senior debt instead, holders of the notes may receive less, ratably, than holders of trade payables in any such proceeding. In any of these cases, we may not have sufficient funds to pay all of our creditors and holders of notes may receive less, ratably, than the holders of our senior debt.

As of June 30, 2006, the notes were subordinated to $263.2 million of senior debt and approximately $70.8 million was available for borrowing as additional senior debt under our amended senior secured credit facility. We are permitted to incur substantial additional indebtedness, including senior debt, in the future under the terms of the indenture.

We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture.

Upon the occurrence of certain specific kinds of change of control events, we will be required to offer to repurchase all notes of the principal amount thereof plus accrued and unpaid interest to the date of repurchase. However, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in our amended senior secured credit facility will not allow such repurchases. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a “Change of Control” under the indenture. See “Description of Exchange Notes — Change of Control.”

Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from our subsidiary guarantors.

If a bankruptcy case or lawsuit is initiated by unpaid creditors of any guarantor, the debt represented by the guarantees entered into by our subsidiary guarantors may be reviewed under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws. Under these laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to other obligations of a guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:

•  received less than reasonably equivalent value or fair consideration for entering into the guarantee; and

•  either:

•  was insolvent or rendered insolvent by reason of entering into a guarantee; or

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•  was engaged in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital; or

•  intended to incur, or believed that it would incur, debts or contingent liabilities beyond its ability to pay such debts or contingent liabilities as they become due.

In such event, any payment by a guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or to a fund for the benefit of the guarantor’s creditors under those circumstances.

If a guarantee of a subsidiary were voided as a fraudulent conveyance or held unenforceable for any other reason, holders of the notes would be solely creditors of Skilled Healthcare Group, Inc. and of its subsidiaries that have validly guaranteed the notes. The notes then would be effectively subordinated to all liabilities of the subsidiary whose guarantee was voided.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

•  the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets; or

•  the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

•  it could not pay its debts or contingent liabilities as they become due.

A court would likely find that a subsidiary guarantor did not receive reasonably equivalent value or fair consideration for its guarantee, if the guarantor did not substantially benefit directly or indirectly from the issuance of the notes.

In the event of a finding that a fraudulent conveyance or transfer has occurred, the court may void, or hold unenforceable, the subsidiary guarantees, which could mean that you may not receive any payments under the guarantees and the court may direct you to repay any amounts that you have already received from any subsidiary guarantor, to such subsidiary guarantor or a fund for the benefit of such subsidiary guarantor’s creditors. Furthermore, the holders of the notes would cease to have any direct claim against the applicable subsidiary guarantor. Consequently, the applicable subsidiary guarantor’s assets would be applied first to satisfy the applicable subsidiary guarantor’s other liabilities, before any portion of its assets could be applied to the payment of the notes. Sufficient funds to repay the notes may not be available from other sources, including the remaining subsidiary guarantors, if any. Moreover, the voidance of a subsidiary guarantee could result in an event of default with respect to our and our subsidiary guarantors’ other debt that could result in acceleration of such debt (if not otherwise accelerated due to our or our subsidiary guarantors’ insolvency or other proceeding).

On the basis of historical financial information, recent operating history and other factors, we believe that each guarantor, after giving effect to its guarantee of these notes, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.

Each subsidiary guarantee contains a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. This provision may not be effective to protect the guarantees from being voided under fraudulent transfer law or may reduce or eliminate the guarantor’s obligation to an amount that effectively makes the guarantee worthless.

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We may not have access to the cash flow and other assets of our non-guarantor subsidiaries that may be needed to make payments on the notes.

Although much of our business is conducted through our subsidiaries, our off-shore captive insurance subsidiary and our 50% owned pharmacy joint venture have not guaranteed the notes. In addition, under certain circumstances our subsidiary guarantors may be released from their guarantees. See “Description of Exchange Notes.” Accordingly, our ability to make payments on the notes may be or become dependent on the earnings and the distribution of funds from our non-guarantor subsidiaries and joint ventures. Our non-guarantor subsidiaries and joint ventures are permitted under the terms of the indenture to incur additional indebtedness that may severely restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such entities to us. We cannot assure you that the agreements governing the current and future indebtedness of our non-guarantor subsidiaries and joint ventures will permit these entities to provide us with sufficient dividends, distributions or loans to fund payments on the notes when due. In addition, to the extent the guarantees of the notes by our guarantor subsidiaries may be limited or unenforceable, we may also not be able to access the earnings of those subsidiaries to help service the notes. See “— Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from our subsidiary guarantors.”

The notes will be effectively subordinated to all liabilities and claims of creditors of our current and future non-guarantor subsidiaries and joint ventures.

The notes are structurally subordinated to indebtedness and other liabilities of our non-guarantor insurance subsidiary and pharmacy joint venture, along with our future subsidiaries and joint ventures that do not guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries or joint ventures, these non-guarantor subsidiaries and joint ventures will pay the holders of their debts, holders of preferred equity interests and their trade creditors before they will be able to distribute any of their assets to us. Our non-guarantor subsidiary and pharmacy joint venture have aggregate consolidated liabilities, excluding liabilities owing to us or any guarantor, as of June 30, 2006, of $6.5 million.

We are controlled by our Sponsor and its interest as an equity holder may conflict with yours as a creditor.

Our Sponsor beneficially owns substantially all of our common stock. Accordingly, our Sponsor has the power to control us. The interests of our Sponsor may not in all cases be aligned with yours. For example, our equity holders may have an interest in pursuing acquisitions, divestitures, financings or other transactions, that, in their judgment, could enhance their equity investment, even though these transactions might involve risks to the holders of the notes if the transactions resulted in our being more highly leveraged or significantly change the nature of our business operations or strategy. In addition, if we encounter financial difficulties, or we are unable to pay our debts as they mature, the interests of our equity holders might conflict with those of the holders of the notes. In that situation, for example, the holders of the notes might want us to raise additional equity from our Sponsor or other investors to reduce our leverage and pay our debts, while our Sponsor might not want to increase its investment in us or have its ownership diluted and instead choose to take other actions, such as selling our assets. Additionally, our Sponsor is in the business of making investments in companies and currently hold, and may from time to time in the future acquire, controlling interests in businesses engaged in the healthcare industries that complement or directly or indirectly compete with certain portions of our business. Further, if our Sponsor pursues such acquisitions in the healthcare industry, those acquisition opportunities may not be available to us. So long as our Sponsor continues to indirectly own a significant amount of our equity, even if such amount is less than 50%, it will continue to be able to strongly influence or effectively control our decisions.

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An active trading market may not develop for the notes.

There is no existing trading market for the notes. Neither we nor the initial purchasers of the private notes are obligated to make a market in the exchange notes and, to our knowledge, do not intend to do so. If market-making activities are commenced, they may be discontinued at any time without notice.

We do not intend to apply for listing of the private notes or the exchange notes on any securities exchange or for quotation on The Nasdaq National Market.

The liquidity of any market for the exchange notes will depend on a number of factors, including:

•  the number of holders of the exchange notes;

•  our performance;

•  the market for similar securities;

•  the interest of securities dealers in making a market in the exchange notes; and

•  prevailing interest rates.

We cannot assure you that an active market for the exchange notes will develop or, if developed, that it will continue.

If you do not properly tender your private notes, you will continue to hold unregistered private notes and your ability to transfer private notes will be adversely affected.

We will only issue exchange notes in exchange for private notes that are timely received by the exchange agent. Therefore, you should allow sufficient time to ensure timely delivery of the private notes and you should carefully follow the instructions on how to tender your private notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the private notes. If you do not tender your private notes or if we do not accept your private notes because you did not tender your private notes properly, then, after we consummate the exchange offer, you may continue to hold private notes that are subject to the existing transfer restrictions. In addition, if you tender your private notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for private notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes.

After the exchange offer is consummated, if you continue to hold any private notes, you may have difficulty selling them because there will be less private notes outstanding. In addition, if a large amount of private notes are not tendered or are tendered improperly, the limited amount of exchange notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could result in a restatement of our financial statements, cause investors to lose confidence in our financial statements and our company and have a material adverse effect on our business.

Prior to this offering, we have been a private company and have not filed reports with the Securities and Exchange Commission. We will become subject to the public reporting requirements of the Securities Exchange Act of 1934 upon the completion of this offering. We produce our consolidated financial statements in accordance with the requirements of generally accepted accounting principles, but our internal accounting controls may not currently meet all standards applicable to companies with publicly traded securities. Effective internal controls are necessary for us to provide reliable financial reports to help mitigate the risk of fraud and to operate successfully as a publicly traded company. As a public company,

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we will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which will require annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accounting firm that addresses both management’s assessments and our internal controls. This requirement will apply to us starting with our annual report for the year ended December 31, 2007. The rules governing the standards that must be met for management to assess our internal controls over financial reporting are new and complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules.

Our fiscal 2005 audit revealed a reportable condition in our internal controls over our financial closing and reporting processes. A reportable condition is a control deficiency, or combination of deficiencies, that adversely affects a company’s ability to initiate, authorize, record, process or report external financial data reliably in accordance with generally accepted accounting principals such that there is a more than remote likelihood that a misstatement of the company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. In particular, we and our independent registered public accounting firm identified numerous post-closing adjustments to our financial statements as part of the audit process. In addition, during our second quarter closing review and as we prepared to register the issuance of the exchange notes, we identified certain accounting errors in our financial statements for the three years ended December 31, 2005 and the first quarter of 2006. These errors primarily related to purchase accounting entries made in connection with the Transactions. As a result of discovering these errors, we undertook a further review of our historical financial statements and identified adjustments to additional accounts. Following this review, our board of directors and independent registered public accounting firm concluded that an amendment of our annual report to holders of our private notes, which included the restatement of our financial statements for the three years ended December 31, 2005, and an amendment of our quarterly report to holders of our private notes for the first quarter of 2006, which included a restatement of our financial statements therein, was necessary. We are in the process of remediating the reportable condition identified above, in order to prevent and detect further errors in the financial statement closing process. We are doing this by hiring staff with the appropriate experience, reviewing our general ledger system setup to produce timely and accurate financial information and performing an evaluation of our internal controls and remediating where necessary. We have implemented many of these measures, and we intend to implement other measures to improve our internal control over financial reporting. If these measures are insufficient to address the issues raised, or if we discover additional internal control deficiencies, we may fail to meet reporting requirements established by the Securities and Exchange Commission and our obligations reporting under the terms of our existing or future indebtedness, our financial statements may contain material misstatements and require restatement and our business and operating results may be harmed. The restatement of previously issued financial statements could also expose us to legal risk. The defense of any such actions could cause the diversion of management’s attention and resources, and we could be required to pay damages to settle such actions if any such actions are not resolved in our favor. Even if resolved in our favor, such actions could cause us to incur significant legal and other expenses. Moreover, we may be the subject of negative publicity focusing on the financial statement inaccuracies and resulting restatement and negative reactions from our stockholders, creditors or others with which we do business. The occurrence of any of the foregoing could harm our business and reputation and cause the price of our securities to decline.

As we prepare to comply with Section 404, we may identify significant deficiencies or errors including, or in addition to those described above that we may not be able to remediate in time to meet our deadline for compliance with Section 404. As a public company, we will be required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. A “material weakness” is a significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

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Testing and maintaining internal controls can divert our management’s attention from other matters that are important to our business. We may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not be able or willing to issue a favorable assessment if we conclude that our internal controls over financial reporting are effective. We cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or their effect on our operations. If either we are unable to conclude that we have effective internal controls over financial reporting or our independent registered public accounting firm are unable to provide us with an unqualified report as required by Section 404, investors could lose confidence in our reported financial information and our company, which could cause us to fail to meet our reporting obligations in the future, which in turn could impact our ability to raise additional financing if needed in the future.

If we fail to implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner, we may also be subject to sanctions or investigation by regulatory authorities such as the Securities and Exchange Commission.

The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company, we will need to comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the Securities and Exchange Commission, with which we are not required to comply as a private company. As a result, we will incur significant legal, accounting and other expenses that we did not incur as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of the time of our board of directors and management, will require us to have additional finance and accounting staff, may make it more difficult to attract and retain qualified officers and members of our board of directors, particularly to serve on our audit committee, and make some activities more difficult, time consuming and costly. We will need to:

•  institute a more comprehensive compliance function;

•  establish new internal policies, such as those relating to disclosure controls and procedures and insider trading;

•  design, establish, evaluate and maintain a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

•  prepare and distribute periodic reports in compliance with our obligations under the federal securities laws;

•  involve and retain to a greater degree outside counsel and accountants in the above activities; and

•  establish an investor relations function.

If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. If our finance and accounting personnel insufficiently support us in fulfilling these public-company compliance obligations, or if we are unable to hire adequate finance and accounting personnel, we could face significant legal liability, which could have a material adverse effect on our financial condition and results of operations. Furthermore, if we identify any issues in complying with those requirements (for example, if we or our independent registered public accountants identified a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us.

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In addition, we also expect that being a public company subject to these rules and regulations will require us to modify our director and officer liability insurance, and we may be required to accept reduced policy limits or incur substantially higher costs to obtain the same or similar coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive officers.

Risks Related to our Business and Industry

We depend heavily on reimbursement from Medicare and Medicaid and payments from these payors may be reduced.

For the year ended December 31, 2005, we derived approximately 36.3% and 33.5% of our total revenue from the Medicare and Medicaid programs, respectively, and for the six months ended June 30, 2006, we derived approximately 36.7% and 31.6% of our total revenue from the Medicare and Medicaid programs, respectively. In addition, our rehabilitation therapy services, for which we receive payment from private payors, are significantly dependent on Medicare and Medicaid funding, as those private payors are often reimbursed by these programs. Accordingly, if reimbursement rates under these programs are reduced or fail to increase as quickly as our costs, our business and results of operations will be adversely affected.

The Medicare and Medicaid programs are subject to statutory and regulatory changes, retroactive rate adjustments, administrative or executive orders and government funding restrictions, all of which may materially adversely affect the rates at which these programs reimburse us for our services. Implementation of these and other measures to reduce reimbursement has in the past and could in the future result in substantial reductions in our revenues and operating margins. Additionally, net revenue from these payors can be retroactively adjusted after a new examination during the claims settlement process or as a result of post-payment audits. Payors may disallow our requests for reimbursement based on determinations that certain costs are not reimbursable or reasonable because either adequate or additional documentation was not provided or because certain services were not covered or reasonably necessary. There also continues to be new legislation and regulatory proposals that could impose further limitations on government payments to health care providers.

We cannot assure you that adequate reimbursement levels will continue to be available for our services that are currently being reimbursed by Medicare and Medicaid. Further limits on the scope of services being reimbursed or on reimbursement could have a material adverse effect on our revenues, financial conditions and results of operations. For example, prior reductions in governmental reimbursement rates partially contributed to our bankruptcy filing under Chapter 11 of the United States Bankruptcy Code on October 21, 2001.

Medicare.  Over the past several years, the federal government has periodically changed various aspects of Medicare reimbursements for skilled nursing facilities. Reductions in Medicare reimbursement rates or changes in the way Medicare pays for services could cause our revenue and net income to decline materially. Reductions in Medicare reimbursement rates could be caused by many factors, including:

•  administrative or legislative changes to the base rates or the basis of payment under the applicable prospective payment system;

•  the reduction or elimination of annual rate increases;

•  an increase in the co-payment or deductible payable by beneficiaries;

•  adjustments to the components of the wage index used in determining reimbursement rates; or

•  changes to the application of, exceptions to and levels of therapy reimbursement caps established by Medicare.

The payment system applicable to inpatient skilled nursing facility services was modified most recently in August 2005 when the federal agency charged with administering the Medicare and Medicaid programs, known as the Centers for Medicare and Medicaid Services, or CMS, refined the existing prospective

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payment system. We generally receive fixed payments from Medicare for our services based on the acuity of care provided to each patient, as determined by their assignment to a Resource Utilization Group, or RUG. Recently, CMS increased the number of distinct RUGs from 44 to 53. While this refinement is expected to increase spending across all U.S. nursing homes for fiscal year 2006, future changes in Medicare reimbursement could have an adverse impact on our financial condition or results of operations.

Medicare currently provides for an annual adjustment to the various RUG payment rates, based upon the increase or decrease of the medical care expenditure category of the Consumer Price Index, which may be less than actual inflation. This adjustment was 3.1% for 2006 and has been announced to be 3.1% for 2007, but it could be eliminated or reduced in any given year.

Our rehabilitation and hospice businesses are also highly dependent on Medicare revenue. If there are changes in Medicare reimbursement rates or methods governing Medicare reimbursement, then the third parties to which we provide other services may either decline to utilize our services, reduce the level of services which they receive, seek lower cost providers or require us to lower our prices, any of which could have a material adverse effect on our revenue and net income.

Effective January 1, 2006, there are caps on the annual amount that Medicare Part B will pay for physical and speech language therapy and occupation therapy for any given patient. Despite certain exceptions applicable for calendar year 2006, these caps may result in decreased demand for rehabilitation therapy services for beneficiaries whose therapy would have been reimbursed under Part B but for the caps. This decrease in demand could be exacerbated when the exceptions to the caps expire on December 31, 2006.

Medicaid.  Jointly financed by the federal and state governments, Medicaid is the payor for approximately 45% of nursing home services purchased in the United States. Rapidly increasing Medicaid spending, combined with slow state revenue growth, has led many states to institute measures aimed at controlling spending growth. Given that Medicaid expenditures are a significant and growing component of state budgets, we expect continuing cost containment pressures on Medicaid outlays for skilled nursing facilities in the states in which we operate.

Under Medicaid, most State expenditures for medical assistance are matched by the Federal Government. The federal medical assistance percentage, which is the percentage of Medicaid expenses paid by the federal government, will range from 50% to 76% for fiscal year 2007. On average, the Medicaid program is financed 57% by the federal government and 43% by the states.

To generate funds to pay for the increasing costs of the Medicaid program, many states utilize financial arrangements such as provider taxes. Under the provider tax arrangements, states collect taxes from health care providers and then return the revenue to hospitals as a Medicaid expenditure, whereby states could then claim additional federal medical assistance percentage.

To curb states Medicaid funding schemes, Congress placed restrictions on states’ use of provider tax and donation programs as a source of state matching funds. Under the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991 the federal medical assistance percentage available to a state was reduced by the total amount of health care related taxes that the state imposed, unless certain requirements are met. The federal medical assistance percentage is not reduced if the state taxes are broad-based and not applied specifically to Medicaid reimbursed services, and providers are at risk for the amounts of tax assessed and not guaranteed to receive reimbursement for the tax assessed through the applicable state Medicaid program.

In addition, in the most recent Budget Proposal for 2007, President Bush announced that the Department of Health and Human Services will seek a regulatory change to the provider tax policy. Under current rules, taxes imposed on providers may not exceed six percent of total revenue and must be applied uniformly across all health care providers in the same class. The proposed regulatory change would phase down the allowable provider tax rate from six percent to three percent. As a result, states would have less funds available for payment of Medicaid expenses, which would also decrease federal matching payments.

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This proposal is projected to save the federal government $2.1 billion over five years in Medicaid expenditures for all services. This development could result in Medicaid rate reductions to levels that are lower than our operating costs.

Recent Legislation.  The Deficit Reduction Act of 2005, or DRA, provides for a reduction in overall Medicare and Medicaid spending by approximately $11.0 billion over five years. Among other things, the DRA limits the ability of individuals to become eligible for Medicaid by increasing from three years to five years the time period, known as the “look back period,” in which the transfer of assets by an individual for less than fair market value will render the individual ineligible for Medicaid benefits for nursing home care. Under the DRA, a person that transferred assets for less than the fair market value during the look-back period will be ineligible for Medicaid for so long as they would have been able to fund their cost of care absent the transfer or until the transfer would no longer have been made during the look-back period. This period is referred to as the penalty period. The DRA also changes the calculation for determining when the penalty period begins and prohibits states from ignoring small asset transfers and certain other asset transfer mechanisms. In addition, the legislation reduces Medicare skilled nursing facility bad debt payments by 30.0% for those individuals who are not dually eligible for Medicare and Medicaid. This provision is expected to reduce payments to skilled nursing facilities by $100.0 million over five years (fiscal years 2006 — 2010). While the fiscal year 2006 Medicare skilled nursing facility payment rates will not decrease payments to skilled nursing facilities, the loss of revenue associated with future changes in skilled nursing facility payments could have a material adverse effect on our financial condition or results of operation.

Healthcare reform legislation could adversely affect our revenue and financial condition.

In recent years, there have been numerous initiatives on the federal and state levels for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services in the United States. These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including to provide comprehensive healthcare coverage to the public under governmental funded programs, to minor modifications to existing programs. Aspects of certain of these healthcare initiatives, such as reductions in funding of the Medicare and Medicaid programs, potential changes in reimbursement regulations by CMS, changes in Medicaid eligibility criteria, enhanced pressure by state and federal agencies and private payors to contain healthcare costs, greater state flexibility and additional operational requirements, could adversely affect us. The ultimate content or timing of any future healthcare reform legislation, and its impact on us, is impossible to predict. If significant reforms are made to the U.S. healthcare system, those reforms may have an adverse effect on our financial condition and results of operations.

In addition, we incur considerable administrative costs in monitoring the changes made within the various reimbursement programs, determining the appropriate actions to be taken in response to those changes and implementing the required actions to meet the new requirements and minimize the repercussions of the changes to our organization, reimbursement rates and costs.

We are subject to extensive laws and government regulations and face periodic reviews, audits and investigations under our contracts with federal and state government agencies, and these audits could have adverse findings that may negatively impact our business.

We, along with other companies in the healthcare industry, are required to comply with extensive and complex laws and regulations at the federal, state and local government levels relating to, among other things:

•  licensure and certification;

•  adequacy and quality of healthcare services;

•  qualifications of healthcare and support personnel;

•  quality of medical equipment;

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•  confidentiality, maintenance and security issues associated with medical records and claims processing;

•  relationships with physicians and other referral sources and recipients;

•  constraints on protective contractual provisions with patients and third-party payors;

•  operating policies and procedures;

•  addition of facilities and services; and

•  billing for services.

Many of these laws and regulations are expansive, and we do not always have the benefit of significant regulatory or judicial interpretation of these laws and regulations. In addition, certain regulatory developments, such as revisions in the building code requirements for assisted living and skilled nursing facilities, mandatory increases in scope and quality of care to be offered to residents and revisions in licensing and certification standards, could have a material adverse effect on us. In the future, different interpretations or enforcement of these laws and regulations could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel, services, capital expenditure programs and operating expenses.

As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations. Private pay sources also reserve the right to conduct audits. An adverse review, audit or investigation could result in:

•  refunding amounts we have been paid pursuant to the Medicare or Medicaid programs or from private payors;

•  state or federal agencies imposing fines, penalties, exclusions and other sanctions on us;

•  temporary suspension of payment for new patients to the facility;

•  exclusion from participation in the Medicare or Medicaid programs or one or more private payor networks;

•  damage to our reputation; and

•  in extreme circumstances, the revocation of a facility’s license.

Both federal and state government agencies have heightened and coordinated civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare companies and, in particular, skilled nursing facilities. This includes investigations of:

•  cost reporting and billing practices;

•  quality of care;

•  financial relationships with referral sources; and

•  the medical necessity of services provided.

If any of our facilities is decertified or loses its licenses, our revenue and operating income would be adversely affected. In addition, the report of such issues at one of our facilities could harm our reputation for quality care and lead to a reduction in our patient referrals and ultimately our revenue and operating income.

We also are subject to potential lawsuits under the Federal False Claims Act and comparable state laws for submitting fraudulent claims for services to any health care program or payor, as well as other prohibited acts. These lawsuits, which may be initiated by the government or by a private party asserting direct knowledge of fraud, can involve significant monetary damages, fines and attorney fees, a portion of which may be shared with the relators who successfully bring these suits. Insurance is not available to cover

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such losses. False claims and “qui tam” whistleblower lawsuits may be initiated against any person or entity, alleging such person or entity has knowingly or recklessly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or has made a false statement or used a false record to get a claim approved. Penalties for False Claims Act violations include fines ranging from $5,500 to $11,000 for each false claim, plus up to three times the amount of damages sustained by the federal government. A False Claims Act violation may provide the basis for exclusion from federally-funded healthcare programs. In addition, some states, including Texas and California, have adopted similar whistleblower and false claims provisions.

We are also subject to federal and state laws that govern financial and other arrangements among health care providers, their owners, vendors and referral sources. These laws prohibit kickbacks, bribes and rebates, as well as certain direct and indirect payments or fee-splitting arrangements that are designed to induce the referral of patients to a particular provider for medical products and items or services payable by any federal health care program. They also prohibit some physician self-referrals. Possible sanctions for violation of any of these restrictions or prohibitions include loss of eligibility to participate in federal and state reimbursement programs and civil and criminal penalties. From time to time, we may seek guidance as to the interpretation of these laws; however, there can be no assurance that our practices will be consistent with the way such laws ultimately will be interpreted. In addition, we could be forced to expend considerable resources responding to an investigation or other enforcement action under these laws or regulations.

We are also required to comply with state and federal laws governing the transmission, privacy and security of health information. The Health Insurance Portability and Accountability Act of 1996, or HIPAA, requires us to comply with certain standards for the use of individually identifiable health information within our company, and the disclosure and electronic transmission of such information to third parties, such as payors, residents, business associates and patients. These include standards for common electronic healthcare transactions, such as claim submission, plan eligibility, payment information and the use of electronic signatures; unique identifiers for providers, employers and health plans; and the security and privacy of individually identifiable health information. In addition, some states have enacted comparable or, in some cases, more stringent privacy and security laws. If we fail to comply with these state and federal laws, we could be subject to criminal penalties and civil sanctions and be forced to modify our policies and procedures, which could have an adverse effect on our financial condition and results of operations.

We are unable to predict the future course of federal, state and local regulation or legislation, including Medicare and Medicaid statutes and regulations, or the intensity of federal and state enforcement actions. Changes in the regulatory framework, our failure to obtain or renew required regulatory approvals or licenses or to comply with applicable regulatory requirements, the suspension or revocation of our licenses or our disqualification from participation in federal and state reimbursement programs, or the imposition of other harsh enforcement sanctions could have a material adverse effect upon our results of operations, financial condition and liquidity. Furthermore, should we lose licenses or certifications for a number of our facilities as a result of regulatory action or otherwise, we could be deemed to be in default under some of our agreements, including agreements governing outstanding indebtedness.

Significant legal actions, which are commonplace in our industry, could subject us to increased operating costs and substantial uninsured liabilities, which would materially and adversely affect our results of operations, liquidity and financial condition.

The long-term care industry has experienced an increasing trend in the number and severity of litigation claims involving punitive damages and settlements. We believe that this trend is endemic to the industry and is a result of the increasing number of large judgments, including large punitive damage awards, against long-term care providers in recent years resulting in an increased awareness by plaintiffs’ lawyers of potentially large recoveries. According to a report issued by AON Risk Consultants in March 2005 on long-term care operators’ professional liability and general liability costs, the average cost per bed for professional liability and general liability costs has increased from $430 in 1993 to $2,310 per bed in 2004. This has resulted from average professional liability and general liability claims in the long-term care

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industry more than doubling from $72,000 in 1993 to $176,000 in 2004 and the average number of claims per 1,000 beds increasing at an average annual rate of 10% from 6.0 in 1993 to 13.1 in 2004. Should this trend of increasing professional liability and general liability costs continue or accelerate, we may not be able to increase our revenue sufficiently to cover the cost increases, and our operating income could suffer.

In 2001 we were subject to a significant adverse professional liability judgment. As a result of this judgment, the plaintiff placed a lien on our assets. The judgment and resulting lien contributed to our voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code on October 21, 2001. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Historical Overview — Reorganization under Chapter 11.”

A significant portion of our business is concentrated in a few markets, and an economic downturn or changes in the laws affecting our business in those markets could have a material adverse effect on our operating results.

For the year ended December 31, 2005 we received approximately 56.0% and 36.0% of our revenue from operations in California and Texas, respectively, and for the six months ended June 30, 2006 we received approximately 54.0% and 34.0% of our revenue from operations in California and Texas, respectively. Accordingly, isolated economic conditions prevailing in either of these markets could affect the ability of our patients and third-party payors to reimburse us for our services, either through a reduction of the tax base used to generate state funding of Medicaid programs, an increase in the number of indigent patients eligible for Medicaid benefits or other factors. An economic downturn or changes in the laws affecting our business in these markets could have a material adverse effect on our financial position, results of operations and cash flows.

Possible changes in the acuity mix of residents and patients as well as payor mix and payment methodologies may significantly reduce our profitability or cause us to incur losses.

Our revenue is affected by our ability to attract a favorable patient acuity mix, and by our mix of payment sources. Changes in the type of patients we attract, as well as our payor mix among private payors, managed care companies, Medicare and Medicaid significantly affect our profitability because not all payors reimburse us at the same rates. Particularly, if we fail to maintain our proportion of high-acuity patients or if there is any significant increase in the percentage of our population for which we receive Medicaid reimbursement, our financial position, results of operations and cash flow may be adversely affected.

It is difficult to attract and retain qualified nurses, therapists, healthcare professionals and other key personnel, which increases our costs relating to these employees and could cause us to fail to comply with state staffing requirements at one or more of our facilities.

We rely on our ability to attract and retain qualified nurses, therapists and other healthcare professionals. The market for these key personnel is highly competitive, and we could experience significant increases in our operating costs due to shortages in their availability. Like other healthcare providers, we have experienced difficulties in attracting and retaining qualified personnel, especially facility administrators, nurses, therapists, certified nurses’ aides and other important healthcare personnel. We may continue to experience increases in our labor costs, primarily due to higher wages and greater benefits required to attract and retain qualified healthcare personnel, and such increases may adversely affect our profitability.

This shrinking labor market and the high demand for such employees has created high turnover among clinical professional staff, as many seek to take advantage of the supply of available positions. A lack of qualified personnel at a facility could result in significant increases in labor costs and an increased reliance on expensive temporary nursing agencies or otherwise adversely affect operations at that facility. If we are unable to attract and retain qualified professionals, our ability to provide services to our residents and patients may decline and our ability to grow may be constrained.

Increased attention to the quality of care provided in skilled nursing facilities has caused several states to mandate, and other states to consider mandating, minimum staffing laws that require minimum nursing

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hours of direct care per resident per day. These minimum staffing requirements further increase the gap between demand for and supply of qualified individuals, and lead to higher labor costs. We operate a number of facilities in California, which has enacted legislation establishing minimum staffing requirements for facilities operating in that state. Our ability to satisfy these staffing requirements will depend upon our ability to attract and retain qualified healthcare professionals, including nurses, certified nurse’s assistants and other personnel which is difficult, given existing shortages of these employees in the labor markets. Failure to comply with these minimum staffing requirements may result in the imposition of fines or other sanctions. Furthermore, if states do not appropriate additional funds (through Medicaid program appropriations or otherwise) sufficient to pay for any additional operating costs resulting from minimum staffing requirements, our profitability may be materially adversely affected.

If we fail to attract patients and residents and compete effectively with other healthcare providers, our revenue and profitability may decline and we may incur losses.

The long-term healthcare services industry is highly competitive. Our skilled nursing facilities compete primarily on a local and regional basis with many long-term care providers, from national and regional chains to smaller providers owning as few as a single nursing center. We also compete with inpatient rehabilitation facilities and long-term acute care hospitals. Increased competition could limit our ability to attract and retain patients, maintain or increase rates or to expand our business. Our ability to compete successfully varies from location to location depending on a number of factors, including the number of competing centers in the local market, the types of services available, our local reputation for quality care of patients, the commitment and expertise of our staff and physicians, our local service offerings and treatment programs, the cost of care in each locality, and the physical appearance, location, age and condition of our facilities. If we are unable to attract patients to our facilities, particularly the high-acuity patients we target, then our revenue and profitability will be adversely affected. Some of our competitors have greater financial and other resources than us, may have greater brand recognition and may be more established in their respective communities than we are. Competing long-term care companies may also offer newer facilities or different programs or services than we do and may thereby attract our patients who are presently residents of our facilities, potential residents of our facilities, or who are otherwise receiving our healthcare services. Other competitors may accept a lower margin, and therefore, present significant price competition for managed care and private pay patients.

We also encounter competition in connection with our other related healthcare services, including our rehabilitation therapy services provided to third-party facilities, assisted living facilities, hospice care and institutional pharmacy services. Generally, this competition is national, regional and local in nature. Many companies competing in these industries have greater financial and other resources than we have. The primary competitive factors for these other related healthcare services are similar to those for our skilled nursing and rehabilitation therapy businesses and include reputation, the cost of services, the quality of clinical services, responsiveness to customer needs and the ability to provide support in other areas such as third-party reimbursement, information management and patient record-keeping. Given the relatively low barriers to entry and continuing health care cost containment pressures in the assisted living industry, we expect that the assisted living industry will become increasingly competitive in the future. Increased competition in the future could limit our ability to attract and retain residents, maintain or increase resident service fees, or expand our business.

In addition, our institutional pharmacy services generally compete on price and quality of the services provided. The introduction of the Medicare Part D benefit may also have an impact on our competitiveness in the pharmacy business by providing patients with an increased range of pharmacy alternatives and putting pressure on pharmacy plans to reduce prices.

Insurance coverage may become increasingly expensive and difficult to obtain for long-term care companies, and our self insurance may expose us to significant losses.

It may become more difficult and costly for us to obtain coverage for patient care liabilities and certain other risks, including property and casualty insurance. Insurance carriers may require long-term care

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companies to significantly increase their self-insured retention levels and/or pay substantially higher premiums for reduced coverage for most insurance coverages, including workers’ compensation, employee healthcare and patient care liability.

We self-insure a significant portion of our potential liabilities for several risks, including professional liability, general liability and workers’ compensation. In California, Texas and Nevada, we have professional and general liability insurance with an occurrence limit of $2 million per loss and an annual aggregate coverage limit of $6 million. In Kansas we have occurrence based professional and general liability insurance with an occurrence limit of $1 million per loss and an annual aggregate coverage limit for all facilities in these states of $3 million for each individual facility. In Missouri we have claims-made based professional and general liability insurance with an occurrence limit of $1 million per loss and an annual aggregate coverage limit of $3 million for each individual facility. We have also purchased excess general and professional liability insurance coverage providing an additional $12 million of coverage for losses arising from any claims in excess of $3 million. We also maintain a $1 million self-insured professional and general liability retention per claim in California, Nevada and Texas. We maintain no deductibles in Kansas and Missouri. Additionally, we self insure the first $1 million per workers’ compensation claim in each of California and Nevada. We purchase workers’ compensation policies for Kansas and Missouri with no deductibles. We have elected to not carry workers’ compensation insurance in Texas and we may be liable for negligence claims that are asserted against us by our employees.

Due to our self-insured retentions under our professional and general liability and workers’ compensation programs, there is no limit on the maximum number of claims or amount for which we can be liable in any policy period. We base our loss estimates on independent actuarial analyses, which determine expected liabilities on an undiscounted basis, including incurred but not reported losses, based upon the available information on a given date. It is possible, however, for the ultimate amount of losses to exceed our estimates and our insurance limits. In the event our actual liability exceeds our estimates for any given period, our results of operations and financial condition could be materially adversely impacted.

At June 30, 2006, we had $37.9 million in accruals for known or potential uninsured general and professional liability claims based on claims experience and an independent actuarial review. We may need to increase our accruals as a result of future actuarial reviews and claims that may develop. An adverse determination in legal proceedings, whether currently asserted or arising in the future, could have a material adverse effect on our business.

If our referral sources fail to view us as an attractive long-term care provider, our patient base may decrease.

We rely significantly on appropriate referrals from physicians, hospitals and other healthcare providers in the communities in which we deliver our services to attract the kinds of patients we target. Our referral sources are not obligated to refer business to us and may refer business to other healthcare providers. We believe many of our referral sources refer business to us as a result of the quality of our patient service and our efforts to establish and build a relationship with them. If we lose, or fail to maintain, existing relationships with our referral resources, fail to develop new relationships or if we are perceived by our referral sources for any reason as not providing high-quality patient care, the quality of our patient mix could suffer and our revenue and profitability could decline.

We may be unable to reduce costs to offset decreases in our occupancy rates or other expenses completely.

We depend on implementing adequate cost management initiatives in response to fluctuations in levels of occupancy in our skilled nursing and assisted living facilities and in other sources of income in order to maintain our current cash flow and earnings levels. Fluctuation in our occupancy levels may become more common as we increase our emphasis on patients with shorter stays but higher acuities. A decline in our occupancy rates could result in decreased revenue. If we are unable to put in place corresponding reductions in costs in response to falls in census or other revenue shortfalls, we may be unable to prevent future decreases in earnings. As a result, our financial condition and operating results may be adversely affected.

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If we do not achieve and maintain competitive quality of care ratings from CMS, our business may be negatively affected.

CMS provides comparative data available to the public on its web site, rating every skilled nursing facility operating in each state based upon quality of care indicators. These quality of care indicators include such measures as percentages of patients with infections, bedsores and unplanned weight loss. If we are unable to achieve quality of care ratings that are comparable or superior to those of our competitors, our ability to attract and retain patients, particularly high-acuity patients, could be adversely affected and, as a result, our revenue and profitability could decline.

Consolidation of managed care organizations and other third-party payors or reductions in reimbursement from these payors may adversely affect our revenue and income or cause us to incur losses.

Managed care organizations and other third-party payors have continued to consolidate in order to enhance their ability to influence the delivery of healthcare services. Consequently, the healthcare needs of a large percentage of the United States population are increasingly served by a small number of managed care organizations. These organizations generally enter into service agreements with a limited number of providers for needed services. These organizations have become an increasingly important source of revenue and referrals for us. To the extent that such organizations terminate us as a preferred provider or engage our competitors as a preferred or exclusive provider, our business could be materially adversely affected.

In addition, private third-party payors, including managed care payors, are continuing their efforts to control healthcare costs through direct contracts with healthcare providers, increased utilization reviews, or reviews of the propriety of, and charges for, services provided, and greater enrollment in managed care programs and preferred provider organizations. As these private payors increase their purchasing power, they are demanding discounted fee structures and the assumption by healthcare providers of all or a portion of the financial risk associated with the provision of care. Significant reductions in reimbursement from these sources could materially adversely affect our business.

Annual caps that limit the amounts that can be paid for outpatient therapy services rendered to any Medicare beneficiary may reduce our future net operating revenue and profitability or cause us to incur losses.

Some of our rehabilitation therapy revenue is paid by the Medicare Part B program under a fee schedule. Congress has established annual caps that limit the amounts that can be paid (including deductible and coinsurance amounts) for rehabilitation therapy services rendered to any Medicare beneficiary under Medicare Part B. The Balanced Budget Act of 1997, or BBA, requires a combined cap for physical therapy and speech-language pathology and a separate cap for occupational therapy. Due to a series of moratoria enacted subsequent to the BBA, the caps were only in effect in 1999 and for a few months in 2003. With the expiration of the most recent moratorium, the caps were reinstated on January 1, 2006 at $1,740 for the physical therapy and speech therapy cap and $1,740 for the occupational therapy cap.

President Bush signed the Deficit Reduction Act of 2005, or DRA, into law on February 8, 2006. The DRA directed CMS to create a process to allow exceptions to therapy caps for certain medically necessary services provided on or after January 1, 2006 for patients with certain conditions or multiple complexities whose therapy is reimbursed under Medicare Part B. The majority of the residents in our skilled nursing facilities and patients served by our rehabilitation therapy programs whose therapy is reimbursed under Medicare Part B have qualified for the exceptions to these reimbursement caps. Unless extended, these exceptions will expire on December 31, 2006.

The application of annual caps, or the discontinuation of exceptions to the annual caps, could have an adverse effect on our integrated rehabilitation therapy revenue as well as the rehabilitation therapy revenue that we receive from third-party facilities for treating their Medicare Part B beneficiaries. Additionally, the exceptions to these caps may not be extended beyond December 31, 2006, which would have an even greater adverse effect on our revenue.

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Delays in reimbursement may cause liquidity problems.

If we have information systems problems or issues arise with Medicare, Medicaid or other payors, we may encounter delays in our payment cycle. Any future timing delay may cause working capital shortages. As a result, working capital management, including prompt and diligent billing and collection, is an important factor in our consolidated results of operations and liquidity. Our working capital management procedures may not successfully ameliorate the effects of any delays in our receipt of payments or reimbursements. Accordingly, such delays could have an adverse effect on our liquidity and financial condition.

Our rehabilitation and other related healthcare services are also subject to delays in reimbursement, as we act as vendors to other providers who in turn must wait for reimbursement from other third-party payors. Each of these customers is therefore subject to the same potential delays to which our nursing homes are subject, meaning any such delays would further delay the date we would receive payment for the provision of our related healthcare services. As we continue to grow and expand the rehabilitation and other complementary services that we offer to third parties, we may incur increasing delays in payment for these services, and these payment delays could have an adverse effect on our liquidity and financial condition.

Our success is dependent upon retaining key personnel.

Our senior management team has extensive experience in the healthcare industry. We believe that they have been instrumental in guiding our emergence from Chapter 11, instituting valuable performance and quality monitoring and driving innovation. Accordingly, our future performance is substantially dependent upon the continued services of our senior management team. The loss of the services of any of these persons could have a material adverse effect upon us.

Future acquisitions may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities.

We intend to selectively pursue acquisitions of skilled nursing facilities, assisted living facilities and other related healthcare operations. Acquisitions may involve significant cash expenditures, debt incurrence, operating losses and additional expenses that could have a material adverse effect on our financial position, results of operations and liquidity. Acquisitions involve numerous risks, including:

•  difficulties integrating acquired operations, personnel and accounting and information systems, or in realizing projected efficiencies and cost savings;

•  diversion of management’s attention from other business concerns;

•  potential loss of key employees or customers of acquired companies;

•  entry into markets in which we may have limited or no experience;

•  increasing our indebtedness and limiting our ability to access additional capital when needed;

•  assumption of unknown material liabilities or regulatory issues of acquired companies, including for failure to comply with healthcare regulations; and

•  straining of our resources, including internal controls relating to information and accounting systems, regulatory compliance, logistics and others.

Furthermore, certain of the foregoing risks could be exacerbated when combined with other growth measures that we expect to pursue.

Our operations are subject to environmental and occupational health and safety regulations, which could subject us to fines, penalties and increased operational costs.

We are subject to a wide variety of federal, state and local environmental and occupational health and safety laws and regulations. Regulatory requirements faced by healthcare providers such as us include those

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relating to air emissions, waste water discharges, air and water quality control, occupational health and safety (such as standards regarding blood-borne pathogens and ergonomics), management and disposal of low-level radioactive medical waste, biohazards and other wastes, management of explosive or combustible gases, such as oxygen, specific regulatory requirements applicable to asbestos, lead-based paints, polychlorinated biphenyls and mold, and providing notice to employees and members of the public about our use and storage of regulated or hazardous materials and wastes. Failure to comply with these requirements could subject us to fines, penalties and increased operational costs. Moreover, changes in existing requirements or more stringent enforcement of them, as well as discovery of currently unknown conditions at our owned or leased facilities, could result in additional cost and potential liabilities, including liability for conducting clean-up, and there can be no guarantee that such increased expenditures would not be significant.

A portion of our workforce has unionized and our operations may be adversely affected by work stoppages, strikes or other collective actions.

In California, certain of our employees are represented by various unions and covered by collective bargaining agreements. In addition, certain labor unions have publicly stated that they are concentrating their organizing efforts within the long-term health care industry. We cannot predict the effect that continued union representation or future organizational activities will have on our business or future operations. We cannot assure you that we will not experience a material work stoppage in the future.

Natural disasters, terrorist attacks or acts of war may seriously harm our business.

Terrorist attacks or acts of nature, such as hurricanes or earthquakes, may cause damage or disruption to us, our employees and our facilities, which could have an adverse impact on our residents. In order to provide care for our residents, we are dependent on consistent and reliable delivery of food, pharmaceuticals, power and other products to our facilities and the availability of employees to provide services at our facilities. If the delivery of goods or the ability of employees to reach our facilities were interrupted due to a natural disaster or a terrorist attack, it would have a significant impact on our facilities. For example, in connection with Hurricane Katrina in New Orleans several nursing home operators unaffiliated with us have been accused of not properly caring for their residents, which has resulted in, among other things, criminal charges being filed against the proprietors of those facilities. Furthermore, the impact, or impending threat, of a natural disaster has in the past and may in the future require that we evacuate one or more facilities, which would be costly and would involve risks, including potentially fatal risks, for the patients. The impact of natural disasters and terrorist attacks is inherently uncertain. Such events could severely damage or destroy one or more of our facilities, harm our business, reputation and financial performance or otherwise cause our business to suffer in ways that we currently cannot predict.

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USE OF PROCEEDS

This exchange offer is intended to satisfy our obligations under the registration rights agreement, dated December 27, 2005, among us, the guarantors, and the initial purchasers for the private notes. We will not receive any proceeds from the issuance of the exchange notes in the exchange offer. We will receive in exchange private notes in like principal amount. We will retire or cancel all of the private notes tendered in the exchange offer.

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THE EXCHANGE OFFER

Purpose Of The Exchange Offer

We sold the private notes on December 27, 2005 to initial purchasers pursuant to a purchase agreement. The initial purchasers subsequently sold the notes to “qualified institutional buyers,” as defined in Rule 144A under the Securities Act, in reliance on Rule 144A and to certain persons outside the United States in reliance on Regulation S of the Securities Act. As a condition to the sale of the private notes, we entered into a registration rights agreement with the initial purchasers on December 27, 2005. Pursuant to the registration rights agreement for the private notes, we agreed that, unless the exchange offer is not permitted by applicable law or SEC policy, we would:

•  file a registration statement with the Securities and Exchange Commission with respect to the exchange notes for the private notes within 240 days of the issuance of the private notes;

•  use our reasonable best efforts to cause the registration statement to be declared effective by the Securities and Exchange Commission within 300 days of the issuance of the private notes; and

•  keep the exchange offer open for a period of not less than 30 days.

Upon the effectiveness of this registration statement, we will offer the exchange notes in exchange for the private notes. We are entitled to consummate the exchange offer 30 days after commencement provided that we have accepted all the private notes validly tendered in accordance with the terms of the exchange offer.

This summary includes only the material terms of the registration rights agreement. For a full description, you should refer to the complete copy of the registration rights agreement, which has been filed as an exhibit to the registration statement for the exchange offer and the exchange notes.

Each broker-dealer that receives exchange notes for its own account in exchange for private notes, where such private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”

Resale of the Exchange Notes

We are making the exchange offer in reliance on the position of the staff of the Securities and Exchange Commission as set forth in interpretive letters addressed to third parties in other transactions. For further information on the Securities and Exchange Commission’s position, see Exxon Capital Holdings Corporation, available May 13, 1988, Morgan Stanley & Co. Incorporated, available June 5, 1991 and Shearman & Sterling, available July 2, 1993, and other interpretive letters to similar effect. We have not sought our own interpretive letter, however, and we cannot assure you that the staff would make a similar determination with respect to the exchange offer as it has in interpretive letters to third parties. Based on these interpretations by the staff, we believe that the exchange notes issued under the exchange offer may be offered for resale, resold or otherwise transferred by you, without further compliance with the registration and prospectus delivery provisions of the Securities Act, so long as:

•  you are acquiring the exchange notes in the ordinary course of your business;

•  you are not participating in, and do not intend to participate in, a distribution of the exchange notes within the meaning of the Securities Act and have no arrangement or understanding with any person to participate in a distribution of the exchange notes within the meaning of the Securities Act;

•  you are not a broker-dealer who is engaged in or intends to engage in, the distribution of the exchange notes;

•  if you are a broker-dealer, you will receive exchange notes for your own account in exchange for private notes that were acquired as a result of market-making activities or other trading activities

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and that you are required to deliver a prospectus in connection with any resale of such exchange notes;

•  you are not an “affiliate” of ours, with the meaning of Rule 405 of the Securities Act, or, if you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and

•  are not acting on behalf of any person or entity who could not truthfully make these statements.

By tendering the private notes in exchange for exchange notes, you will be required to represent to us that each of the above statements applies to you. If you are participating in or intend to participate in, a distribution of the exchange notes, or have any arrangement or understanding with any person to participate in a distribution of the exchange notes to be acquired in this exchange offer, you may be deemed to have received restricted securities and may not rely on the applicable interpretations of the staff of the Securities and Exchange Commission. If you are so deemed, you will have to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction.

Each broker-dealer that receives exchange notes for its own account in exchange for private notes, which the broker-dealer acquired as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of exchange notes received in exchange for private notes which the broker-dealer acquired as a result of market-making or other trading activities.

Terms of the Exchange Offer

Upon the terms and subject to the conditions described in this prospectus, we will accept any and all private notes validly tendered and not withdrawn before the expiration date. You may tender outstanding private notes only in denominations of $2,000 and any greater integral multiple of $1,000.

The form and terms of the exchange notes are the same as the form and terms of the private notes except that:

•  we will register the exchange notes under the Securities Act and, therefore, the exchange notes will not bear legends restricting their transfer;

•  holders of the exchange notes will not be entitled to any of the rights of holders of private notes under the registration rights agreement, which rights will terminate upon the completion of the exchange offer.

The exchange notes will evidence the same debt as the private notes and will be issued under the same indenture, so the exchange notes and the private notes will be treated as a single class of debt securities under the indenture.

As of the date of this prospectus, $200,000,000 in aggregate principal amount of the private notes are outstanding and registered in the name of Cede & Co., as nominee for The Depository Trust Company, or DTC. Only a registered holder of the private notes, or such holder’s legal representative or attorney-in-fact, as reflected on the records of the trustee under the indenture, may participate in the exchange offer. We will not set a fixed record date for determining registered holders of the private notes entitled to participate in the exchange offer.

You do not have any appraisal or dissenters’ rights under the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement and the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the Securities and Exchange Commission.

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We will be deemed to have accepted validly tendered private notes when, as and if we had given oral or written notice of acceptance to the exchange agent. The exchange agent will act as your agent for the purposes of receiving the exchange notes from us.

If you tender private notes in the exchange offer, you will not be required to pay brokerage commissions or fees or transfer taxes with respect to the exchange of private notes pursuant to the exchange offer. We will pay all charges and expenses, other than the applicable taxes described below, in connection with the exchange offer.

Expiration Date; Extensions; Amendment

The term “expiration date” will mean 5:00 p.m., New York City time on          , 2006, unless we, in our sole discretion, extend the exchange offer, in which case the term “expiration date” will mean the latest date and time to which we extend the exchange offer.

To extend the exchange offer, we will:

•  notify the exchange agent of any extension orally or in writing; and

•  publicly announce the extension, including disclosure of the approximate number of private notes deposited to date, each before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

We reserve the right, in our reasonable discretion (by giving oral or written notice of such event to the exchange agent):

•  to delay accepting any private notes;

•  to extend or amend the terms of the exchange offer; or

•  if any conditions listed below under “— Conditions to the Exchange Offer” are not satisfied, to terminate the exchange offer.

We will follow any delay in acceptance, extension or termination as promptly as practicable by oral or written notice to the exchange agent and a press release or oral or written notice to the holders of the private notes. If we amend the exchange offer in a manner we determine constitutes a material change, we will promptly disclose the amendment in a prospectus supplement that we will distribute to the registered holders. We will also extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure, if the exchange offer would otherwise expire during the five to ten business day period.

Interest on the Exchange Notes

The exchange notes will bear interest at the same rate and on the same terms as the private notes. Consequently, the exchange notes will bear interest at a rate equal to 11% per annum. Interest will be payable semi-annually in arrears on January 15 and July 15.

Interest on the exchange notes will accrue from the last interest payment date on which interest was paid on the private notes. Interest on the private notes accepted for exchange will cease to accrue upon the issuance of the exchange notes.

Procedures for Tendering

If you are a DTC participant that has private notes which are credited to your DTC account also by book-entry and which are held of record by DTC’s nominee, you may tender your private notes by book-entry transfer as if you were the record holder. Because of this, references in this prospectus to registered or record holders include DTC participants with private notes credited to their accounts. If you are not a DTC participant, you may tender your private notes by book-entry transfer by contacting your broker or opening an account with a DTC participant.

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If you wish to tender private notes in the exchange offer, you must cause to be transmitted to the exchange agent an agent’s message, which agent’s message must be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. In addition, the exchange agent must receive a timely confirmation of book-entry transfer of the private notes into the exchange agent’s account at DTC through ATOP under the procedure for book-entry transfers described in this prospectus along with a properly transmitted agent’s message, on or before the expiration date.

The term “agent’s message” means a message, transmitted by DTC to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from its participant tendering private notes which are the subject of this book-entry confirmation that this participant has received and agrees to be bound by the terms and subject to the conditions set forth in this prospectus and that we may enforce the agreement against the participant. To receive confirmation of a valid tender of private notes, you should contact the exchange agent at the telephone number listed under “— Exchange Agent.”

Your tender, if not withdrawn before the expiration date, will constitute a binding agreement between you and us in accordance with the terms and subject to the conditions described in this prospectus. Only a registered holder of private notes may tender the private notes in the exchange offer. If you wish to tender private notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should promptly instruct the registered holder to tender on your behalf.

We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of tendered private notes, which determination will be final and binding. We reserve the absolute right to reject any and all private notes not properly tendered or any private notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular private notes. Our interpretation of the terms and conditions of the exchange offer will be final and binding on all parties. Unless waived, you must cure any defects or irregularities in connection with tenders of private notes within the time we determine. Although we intend to notify you of defects or irregularities with respect to tenders of private notes, neither we, the exchange agent nor any other person will incur any liability for failure to give you that notification. We will not deem tenders of private notes to have been made until you cure, or we waive, any defects or irregularities.

While we have no present plan to acquire any private notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any private notes that are not tendered in the exchange offer, we reserve the right in our sole discretion to purchase or make offers for any private notes that remain outstanding after the expiration date. We also reserve the right to terminate the exchange offer, as described below under “— Conditions to the Exchange Offer,” and, to the extent permitted by applicable law, purchase private notes in the open market, in privately negotiated transactions or otherwise. The terms of any of those purchases or offers could differ from the terms of the exchange offer.

By tendering, you will be making several representations to us including that:

(1) the exchange notes to be acquired by you are being acquired by you in the ordinary course of your business;

(2) you are not engaged in, and do not intend to engage in, a distribution of the exchange notes;

(3) you have no arrangement or understanding with any person to participate in the distribution of the exchange notes;

(4) you satisfy specific requirements of your state’s securities regulations;

(5) if you are a broker-dealer or are participating in the exchange offer for the purposes of distributing the exchange notes, you will comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the exchange notes acquired by you and cannot rely on the position of the staff of the Securities and Exchange Commission set forth in no-action letters issued to third parties;

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(6) if you are a broker-dealer, you understand that a secondary resale transaction described in clause (5) above and any resales of exchange notes obtained by you in exchange for unregistered notes acquired by you directly from us should be covered by an effective registration statement containing the selling securityholder information required by Item 507 and Item 508, as applicable, of Regulation S-K under the Securities Act; and

(7) you are not our affiliate as defined in Rule 405 under the Securities Act, or you are an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.

Each broker-dealer that receives exchange notes for its own account in exchange for private notes, where such private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”

Return of Private Notes

If we do not accept any tendered private notes for any reason described in the terms and conditions of the exchange offer or if you withdraw or submit private notes for a greater principal amount than you desire to exchange, we will return the unaccepted, withdrawn or nonexchanged notes without expense to you as promptly as practicable. We will credit such private notes to an account maintained at DTC designated by such DTC participant after the expiration date of the exchange offer or the withdrawal or termination of the exchange offer.

Book Entry Transfer

The exchange agent will make a request to establish an account with respect to the private notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution that is a participant in DTC’s systems may make book-entry delivery of private notes by causing DTC to transfer the private notes into the exchange agent’s account at DTC in accordance with the DTC’s procedures for transfer. Delivery of documents to DTC does not constitute delivery to the exchange agent.

Upon satisfaction of all conditions to the exchange offer, we will accept, promptly after the expiration date, all private notes properly tendered and will issue the exchange notes promptly after acceptance of the private notes.

For purposes of the exchange offer, we will be deemed to have accepted properly tendered private notes for exchange when we have given oral or written notice of that acceptance to the exchange agent. For each initial note accepted for exchange, you will receive an exchange note having a principal amount equal to that of the surrendered initial note.

In all cases, we will issue exchange notes for private notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

•  confirmation of book-entry transfer of your private notes into the exchange agent’s account at DTC; and

•  a properly transmitted agent’s message.

If we do not accept any tendered private notes for any reason set forth in the terms of the exchange offer, we will credit the non-exchanged private notes to your account maintained with DTC.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, you may withdraw tenders of private notes at any time before the exchange offer expires.

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For a withdrawal to be effective, the holder must cause to be transmitted to the exchange agent an agent’s message, which agent’s message must be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. In addition, the exchange agent must receive a timely confirmation of book-entry transfer of the private notes out of the exchange agent’s account at DTC under the procedure for book-entry transfers described in this prospectus along with a properly transmitted agent’s message on or before the expiration date.

We will determine in our sole discretion all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal. Our determination will be final and binding on all parties. Any private notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer, and we will not issue exchange notes with respect to those private notes, unless you validly retender the withdrawn private notes. The private notes will be credited to an account maintained with DTC for the private notes. You may retender properly withdrawn private notes by following one of the procedures described under “— Procedures for Tendering” at any time on or before the expiration date.

Conditions to the Exchange Offer

Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange the exchange notes for, any private notes, and may terminate or amend the exchange offer as provided in this prospectus before the acceptance of the private notes, if, in our reasonable judgment, the exchange offer violates applicable law, rules or regulations or an applicable interpretation of the staff of the Securities and Exchange Commission or any action or proceeding has been instituted or threatened in any court or before any governmental agency with respect to the exchange offer which, in our judgment, might impair our ability to proceed with the exchange offer or materially and adversely affect us.

If we determine in our reasonable discretion that any of these conditions are not satisfied, we may:

•  refuse to accept any private notes and return all tendered private notes to the tendering noteholders;

•  extend the exchange offer and retain all private notes tendered before the exchange offer expires, subject, however, to your rights to withdraw the private notes; or

•  waive the unsatisfied conditions with respect to the exchange offer and accept all properly tendered private notes that have not been withdrawn.

If the waiver constitutes a material change to the exchange offer, we will promptly disclose the waiver by means of a prospectus supplement that we will distribute to the registered holders of the private notes, and we will extend the exchange offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period.

These conditions are for our sole benefit and may be asserted or waived by us in whole or in part at any time and from time to time in our sole discretion. Our failure to exercise any of these rights at any time will not be deemed a waiver of such rights and each of such rights shall be deemed an ongoing right which may be asserted by us at any time and from time to time prior to the expiration of the exchange offer.

In addition, we will not accept for exchange any private notes tendered, and no exchange notes will be issued in exchange for those private notes, if at any time any stop order is threatened or issued with respect to the registration statement for the exchange offer and the exchange notes or the qualification of the indenture under the Trust Indenture Act of 1939. In any such event, we must use every reasonable effort to obtain the withdrawal or lifting of any stop order at the earliest possible moment.

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Termination of Rights

All of your rights under the registration rights agreement will terminate upon consummation of the exchange offer except with respect to our continuing obligations:

•  to indemnify you and parties related to you against specific liabilities, including liabilities under the Securities Act;

•  to provide, upon your request, the information required by Rule 144A(d)(4) under the Securities Act to permit resales of the notes pursuant to Rule 144A;

•  to provide copies of the latest version of the prospectus to broker-dealers upon their request for a period of up to 180 days after the expiration date;

•  to use our best efforts to keep the registration statement effective and to amend and supplement the prospectus in order to permit the prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for the period of time that persons must comply with the prospectus delivery requirements of the Securities Act in order to resell the exchange notes; and

•  to use our best efforts, under specific circumstances, to file a shelf registration statement and keep the registration statement effective to the extent necessary to ensure that it is available for resales of transfer restricted securities by broker-dealers for a period of up to two years.

Shelf Registration

If:

(1) applicable interpretations of the staff of the Securities and Exchange Commission do not permit us to effect the exchange offer; or

(2) for any other reason the exchange offer is not completed within 330 days following the date of the issuance of the private notes; or

(3) any initial purchaser notifies us following consummation of the exchange offer that the private notes held by it are not eligible to be exchanged for the exchange notes in the exchange offer; or

(4) any holder (other than an exchanging dealer) of private notes is prohibited by law or Securities and Exchange Commission policy from participating in the exchange offer or, in the case of any holder (other than an exchanging dealer) that participates in the exchange offer, such holder may not pursuant to the Securities Act resell the exchange notes acquired by it in the exchange offer to the public without delivering a prospectus and such holder so requests,

we will, at our cost:

(1) promptly file with the Securities and Exchange Commission a shelf registration statement covering resales of the private notes or exchange notes, as the case may be;

(2) (A) if the obligation to file a shelf registration statement arises because of Securities and Exchange Commission staff interpretations, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 300^th day after the issuance of the private notes and (B) if the obligation to file a shelf registration statement arises because of reasons other than Securities and Exchange Commission staff interpretations, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 60^th day after the date on which the shelf registration statement is required to be filed; and

(3) keep effective the shelf registration statement until the earliest of (A) the time when the notes covered by the shelf registration statement can be sold pursuant to Rule 144 without any limitations under clauses (c), (e), (f) and (h) of Rule 144, (B) two years from the date of the

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issuance of the private notes and (C) the date on which all notes registered thereunder are disposed of in accordance therewith.

We will provide to each relevant holder copies of the prospectus which is part of the shelf registration statement, notify each holder when the shelf registration statement has been filed and when it has become effective and take certain other actions as are required to permit unrestricted resales of the notes. A holder that sells notes pursuant to the shelf registration statement generally:

•  will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers;

•  will be subject to certain of the civil liability provisions under the Securities Act in connection with the sales; and

•  will be bound by the provisions of the registration rights agreement which are applicable to the holder, including certain indemnification obligations.

In addition, a holder of private notes will be required to deliver information to be used in connection with the shelf registration statement in order to have the holder’s private notes included in the shelf registration statement. The notes of any holder that unreasonably fails to furnish this information within a reasonable time after receiving the request may be excluded from the shelf registration statement.

Liquidated Damages

If:

•  on or prior to the 240^th day following the date of original issuance of the private notes, the exchange offer registration statement has not been filed with the Securities and Exchange Commission;

•  on or prior to the 30^th day after the date on which an obligation to file a shelf registration statement (if obligated to file a shelf registration statement and the obligation arises for reasons other than Securities and Exchange Commission staff interpretations (see “— Shelf Registration”)), such shelf registration statement has not been filed with the Securities and Exchange Commission;

•  on or prior to the 300^th day following the date of the original issuance of the private notes, the exchange offer registration statement has not been declared effective;

•  on or prior to the 300^th day following the date of the original issuance of the private notes (if obligated to file a shelf registration statement and the obligation arises because of Securities and Exchange Commission staff interpretations), the shelf registration statement has not been declared effective;

•  on or prior to the 60^th day after the filing of the shelf registration statement (if obligated to file a shelf registration statement and the obligation arises because of reasons other than Securities and Exchange Commission staff interpretations), the shelf registration statement has not been declared effective;

•  on or prior to the 330^th day following the date of the original issuance of the private notes, the exchange offer has not been consummated; or

•  after either the exchange offer registration statement or the shelf registration statement has been declared effective, such registration statement ceases to be effective or usable (subject to specified exceptions) in connection with resales of notes in accordance with and during the periods specified in the registration rights agreement,

additional interest will accrue on the private notes at a rate of $0.05 per week per $1,000 principal amount of notes for the first 90-day period immediately following the occurrence of any of the events described above, each of which will constitute a registration default, increasing by an additional $0.05 per week per $1,000 principal amount of notes with respect to each subsequent 90-day period until all registration defaults have been cured up to a maximum additional interest rate of $0.30 per week per $1,000 principal

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amount of Notes. Following the cure of all registration defaults, the accrual of the additional interest will cease.

Exchange Agent

We have appointed Wells Fargo Bank National Association, as exchange agent for the exchange offer. You should direct any questions and requests for assistance and requests for additional copies of this prospectus to the exchange agent addressed as follows:

Wells Fargo Bank, National Association

707 Wilshire Boulevard, 17^th Floor

Los Angeles, CA 90017

Attention: Madeliena Hall

Telephone: (213) 614-2588

Facsimile: (213) 614-3355

Fees and Expenses

We will bear the expenses of soliciting tenders. We are making the principal solicitation by mail; however, our officers and regular employees may make additional solicitations by telegraph, telephone or in person.

We have not retained any dealer manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

We will pay the cash expenses incurred in connection with the exchange offer which we estimate to be approximately $     . These expenses include registration fees, fees and expenses of the exchange agent and the trustee, accounting and legal fees and printing costs, among others.

We will pay all transfer taxes, if any, applicable to the exchange of notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of the private notes pursuant to the exchange offer, then you must pay the amount of these transfer taxes. If you do not submit satisfactory evidence of payment of these taxes or exemption from payment, we will bill the amount of these transfer taxes directly to you.

Consequence of Failure to Exchange

Participation in the exchange offer is voluntary. We urge you to consult your financial and tax advisors in making your decisions on what action to take.

Private notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, those private notes may be resold only:

•  to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A;

•  in a transaction meeting the requirements of Rule 144 under the Securities Act;

•  outside the United States to a foreign person in a transaction meeting the requirements of Rule 903 or 904 of Regulation S under the Securities Act;

•  in accordance with another exemption from the registration requirements of the Securities Act and based upon an opinion of counsel if we so request;

•  to us; or

•  pursuant to an effective registration statement.

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In each case, the private notes may be resold only in accordance with any applicable securities laws of any state of the United States or any other applicable jurisdiction.

To the extent private notes are tendered and accepted in the exchange offer, the principal amount of private notes will be reduced by the amount so tendered and a holder’s ability to sell untendered private notes could be adversely affected. Upon completion of the exchange offer, due to the restrictions on transfer of the private notes and the absence of such restrictions applicable to the exchange notes, it is likely that the market, if any, for private notes will be relatively less liquid than the market for exchange notes. Consequently, holders of private notes who do not participate in the exchange offer could experience significant diminution in the value of their private notes, compared to the value of the exchange notes.

Accounting Treatment

For accounting purposes, we will recognize no gain or loss as a result of the exchange offer. The expenses of the exchange offer will be amortized over the term of the exchange notes.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2006:

This table presents unaudited data, and you should read the capitalization table together with “Use of Proceeds,” “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes to our consolidated financial statements included elsewhere in this prospectus.

	As of June 30,
	2006
	(In thousands)
Cash and cash equivalents	$	9,736
Long-term debt obligations, including current portions:
Revolving credit facility(1)	$	—
First lien term loan		257,400
Capital leases and other debt		5,784
11% senior subordinated notes(2)		198,750
Total debt	$	461,934
Stockholders’ equity:
Common stock, $0.001 par value;
Authorized — 1,000
Issued and outstanding — 1,000		—
Additional paid in capital		222,865
Total stockholders’ equity		230,457
Total capitalization	$	692,391

(1)	Our revolving credit facility provides for letters of credit and revolving credit loans. As of June 30, 2006, we had $70.8 available for borrowing under our revolving credit facility, after taking into account $4.2 million of outstanding but undrawn letters of credit.
(2)	Our 11% senior subordinated notes were issued at a 0.7% discount to face value of $200 million. As of June 30, 2006, the 11% senior subordinated notes were recorded on our balance sheet at $198.8 million, net of $1.2 million of unamortized original issue discount.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

We have derived the unaudited pro forma consolidated statement of operations for the year ended December 31, 2005 from our audited historical consolidated financial statements for the year ended December 31, 2005 included elsewhere in this prospectus. We have derived the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2006 and the unaudited pro forma consolidated balance sheet data as of June 30, 2006 from our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2006 included elsewhere in this prospectus. The pro forma financial information is qualified in its entirety by reference to, and should be read in conjunction with, our historical financial statements.

The following unaudited pro forma consolidated financial statements are adjusted, as described below, to give pro forma effect to the following transactions, collectively the pro forma adjustments, all of which are deemed to have occurred simultaneously:

•  the divestiture of an assisted living facility in Carson, California in October 2005 and a skilled nursing facility in Big Spring, Texas (known as Comanche), in November 2005 for an aggregate sale price of $4.6 million, or the “Divestitures”;

•  the acquisition of two skilled nursing facilities and one skilled nursing and residential care facility in Missouri in March 2006 for an aggregate purchase price of $31.0 million, and the acquisition of a leasehold interest in a skilled nursing facility in Nevada in June 2006 for $2.7 million, or the “Acquisitions”; and

•  the Transactions described under “The Transactions;”

The unaudited pro forma consolidated statement of operations for the year ended December 31, 2005 gives effect to the Divestitures, the Acquisitions and the Transactions as if they had occurred on January 1, 2005. The unaudited pro forma consolidated statement of operations for the six months ended June 30, 2006 gives effect to the Acquisitions as if they had occurred on January 1, 2005.

We present the unaudited pro forma consolidated financial statements for informational purposes only; they do not purport to represent what our financial position or results of operations would actually have been had the pro forma adjustments in fact occurred on the assumed dates or to project our financial position at any future date or results of operations for any future period. We have based the unaudited pro forma consolidated financial statements on the estimates and assumptions set forth in the notes to these statements that management believes are reasonable. In the opinion of management, all adjustments have been made that are necessary to present fairly the unaudited pro forma consolidated financial statements.

You should read the unaudited pro forma consolidated financial statements in conjunction with our historical consolidated financial statements and related notes, and other financial information and discussion included elsewhere in this prospectus, including “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Assumptions underlying the pro forma adjustments are described in the accompanying notes, which you should read in conjunction with these unaudited pro forma consolidated financial statements.

The acquisition of our business in the Transactions was accounted for, and is presented in, the pro forma consolidated financial statements, under the purchase method of accounting proscribed in Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations,” with intangible assets recorded in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (SFAS No. 142). Accordingly, the Transactions were accounted for using the purchase method of accounting such that all of our assets and liabilities were recorded at their fair values as of the date of the acquisition including goodwill of $396,035, representing the purchase price in excess of the fair values of the tangible and identifiable intangible assets acquired.

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Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 2005

				Adjustments			Adjustments		Adjustments
				for the			for the		for the
	Historical			Divestitures(A)			Acquisitions(B)		Transactions			Pro Forma
	(In thousands)
Revenue	$	462,847		$	(4,748	)	$	27,180	$	—		$	485,279
Expenses:
Operating		347,228			(4,232	)		20,570		—			363,566
General and administrative		43,323			—			—		215	(C)		43,538
Depreciation and amortization		9,991			(114	)		158		3,034	(D)		13,069
Rent		10,276			(128	)		2,023		—			12,171
		410,818			(4,474	)		22,751		3,249			432,344
Income (loss) before other income (expenses), income taxes, discontinued operations and cumulative effect of a change in accounting principle		52,029			(274	)		4,429		(3,249	)		52,935
Other income (expenses):
Interest expense		(27,629	)		—			—		(15,651	)(E)		(43,280	)
Interest income and other		949			—			—		1,018	(F)		1,967
Change in fair value of interest rate hedge		(165	)		—			—		—			(165	)
Equity in earnings of joint venture		1,787			—			—		—			1,787
Write-off of deferred financing costs		(16,626	)		—			—		—			(16,626	)
Forgiveness of stockholder loan		(2,540	)		—			—		—			(2,540	)
Reorganization expenses		(1,007	)		—			—		—			(1,007	)
Gain on sale of assets		980			(980	)		—		—			—
Total other income (expenses), net		(44,251	)		(980	)		—		(14,633	)		(59,864	)
Income before income taxes and discontinued operations and cumulative effect of a change in accounting principle		7,778			(1,254	)		4,429		(17,882	)		(6,929	)
(Benefit from) provision for income taxes		(13,048	)		2,104			1,772		(7,153	)		(16,325	)
Income (loss) before discontinued operations and cumulative effect of a change in accounting principle		20,826			(3,358	)		2,657		(10,729	)		9,396
Income from discontinued operations, net of tax		14,740			—			—		—			14,740
Cumulative effect of a change in accounting principle, net of tax		(1,628	)		—			—		—			(1,628	)
Net income	$	33,938		$	(3,358	)	$	2,657	$	(10,729	)	$	22,508

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Notes to Pro Forma Consolidated Statement of Operations for the Twelve Months Ended December 31, 2005

(A)	These adjustments reflect the operating income and expenses of the facilities sold in the Divestitures for the periods presented.
(B)	These adjustments reflect the operating income and expenses of the facilities acquired in the Acquisitions for the periods presented.
(C)	Represents the incremental additional management fee payable to our Sponsor following the Transactions, as compared to management fees that we historically paid to our former sponsor.
(D)	Represents change in amortization based upon estimates of the fair values and useful lives of identifiable intangible assets. The respective estimated amount of and lives of each category of identifiable intangible asset is as follows (dollars in thousands):

			Life
	Amount		(Years)
Patient lists	$	800		0.33
Managed care contracts		7,700		5
Leasehold interest		7,012		15
		15,512
Indefinite life intangibles — Tradenames		17,000
Total adjustment to total intangible assets	$	32,512

Identifiable intangible assets have been amortized on a straight-line basis in the unaudited pro forma consolidated statements of operations.

(E) Reflects the elimination of historical interest expense as recorded in our consolidated financial statements prior to the completion of the Transactions and the addition of interest expense resulting from the indebtedness incurred or assumed in connection with the Transactions.

Historical aggregate interest expense and fees as reported	$	(27,629	)
Estimated interest expense and fees in connection with borrowings under our amended senior secured credit facility		19,128
Interest expense and amortization of original issue discount incurred in connection with 11% senior subordinated notes		22,166
Additional amortization of deferred financing costs		1,588
Interest associated with capital leases and other notes		398
Total	$	15,651

Interest expense incurred in connection with borrowings under our amended senior secured credit facility are equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (i) the prime rate announced by Credit Suisse and (ii) the federal funds rate, plus one-half of 1.0% or (b) a reserve adjusted Eurodollar rate. To calculate pro forma interest expense under our amended senior secured credit facility for the period from January 1, 2005 to December 27, 2005, we have assumed a rate of 7.25% (three-month LIBOR plus 2.75% as of December 31, 2005) and applied that rate to the full outstanding principal amount of the amended senior secured credit facility. A 1.0% change in interest rates would change cash interest expense for the year ended December 31, 2005 by approximately $2.6 million.

(F)

Represents the addition of incremental interest income resulting from additional cash of $35,178 that was provided by the Transactions.

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Unaudited Pro Forma Consolidated Statement of Operations
for the Six Months Ended June 30, 2006

				Adjustments
				for the
	Historical			Acquisitions(A)		Pro Forma
	(In thousands)
Revenue	$	256,357		$	6,933	$	263,290
Expenses:
Operating		190,741			5,727		196,468
General and administrative		18,634			—		18,634
Depreciation and amortization		7,247			38		7,285
Rent		4,983			665		5,648
		221,605			6,430		228,035
Income (loss) before other expenses and income taxes		34,752			503		35,255
Other income (expenses):
Interest expense		(22,839	)		—		(22,839	)
Interest income and other		628			—		628
Change in fair value of interest rate hedge		56			—		56
Equity in earnings of joint venture		892			—		892
Total other income (expenses), net		(21,263	)		—		(21,263	)
Income before income taxes		13,489			503		13,992
Provision for (benefit from) income taxes		5,672			201		5,873
Net income (loss)	$	7,817		$	302	$	8,119

Notes to Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2006.

(A) These adjustments reflect the operating income and expenses of the facilities acquired in the Acquisitions for the periods presented.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected historical consolidated financial data. We derived the selected historical consolidated financial data for each of the years ended December 31, 2003, 2004 and 2005 and as of December 31, 2004 and 2005, from our audited consolidated financial statements included elsewhere in this prospectus. We derived the selected historical consolidated financial data for the years ended December 31, 2001 and 2002 and as of December 31, 2001, 2002 and 2003 from our audited consolidated financial statements not included in this prospectus. We derived our selected historical consolidated financial data for the six months ended June 30, 2005 and 2006 and as of June 30, 2006 from our unaudited consolidated financial statements included elsewhere in this prospectus. Our selected historical consolidated statements of operations have been recast to reflect our California pharmacy business, which we sold in March 2005, as discontinued operations. The unaudited historical consolidated financial statements have been prepared on the same basis as our audited historical consolidated financial statements and include all adjustments, consisting of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and results of operations for these periods. Historical results are not necessarily indicative of future performance. Operating results for the six months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2006. Due to the effect of the Transactions on the recorded amounts of assets, liabilities and stockholders’ equity, our financial statements prior to the Transactions are not comparable to our financial statements subsequent to the Transactions. You should read the information set forth below in conjunction with other sections of this prospectus, including “Management’s Discussion and Analysis of Financial Condition and Consolidated Results of Operations,” and our consolidated historical financial statements and related notes included elsewhere in this prospectus.

																Six Months Ended
	Year Ended December 31,															June 30,
	2001			2002			2003			2004			2005			2005			2006
	(Dollars in thousands)
Consolidated Statement of Operations Data
Revenue	$	289,248		$	302,567		$	316,939		$	371,284		$	462,847		$	220,429		$	256,357
Expenses:
Operating		226,332			235,052			246,254			281,395			347,228			166,530			190,741
General and administrative		40,518			18,474			18,758			24,687			43,323			14,784			18,634
Depreciation and amortization		16,018			7,947			8,069			8,597			9,991			4,966			7,247
Rent		7,453			7,320			7,629			8,344			10,276			5,036			4,983
		290,321			268,793			280,710			323,023			410,818			191,316			221,605
(Loss) income before other income (expenses), (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		(1,073	)		33,774			36,229			48,261			52,029			29,113			34,752
Other income (expenses):
Interest expense		(27,538	)		(25,175	)		(27,486	)		(22,370	)		(27,629	)		(11,123	)		(22,839	)
Interest income and other		548			588			147			789			949			362			628
Change in fair value of interest rate hedge		—			—			(1,006	)		(926	)		(165	)		(152	)		56
Equity in earnings of joint venture		98			972			1,161			1,701			1,787			913			892
Reversal of charge related to decertification of a facility		—			—			2,734			—			—			—			—
Write-off of deferred financing costs		—			—			(4,111	)		(7,858	)		(16,626	)		(11,021	)		—
Forgiveness of stockholder loan		—			—			—			—			(2,540	)		—			—
Reorganization expenses		(4,787	)		(12,304	)		(12,964	)		(1,444	)		(1,007	)		(457	)		—
Provision for the impairment of long-lived assets		(111,176	)		—			—			—			—			—			—
Gain on sale of assets		—			—			—			—			980			—			—
Total other income (expenses), net		(142,855	)		(35,919	)		(41,525	)		(30,108	)		(44,251	)		(21,478	)		(21,263	)

46

																Six Months Ended
	Year Ended December 31,															June 30,
	2001			2002			2003			2004			2005			2005			2006
	(Dollars in thousands)
(Loss) income before (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		(143,928	)		(2,145	)		(5,296	)		18,153			7,778			7,635			13,489
(Benefit from) provision for income taxes		(20,531	)		—			(1,645	)		4,421			(13,048	)		(10,279	)		5,672
(Loss) income before discontinued operations and cumulative effect of a change in accounting principle		(123,397	)		(2,145	)		(3,651	)		13,732			20,826			17,914			7,817
(Loss) income from discontinued operations, net of tax		(9,659	)		2,851			1,966			2,789			14,740			14,838			—
Cumulative effect of a change in accounting principle, net of tax		—			—			(12,261	)		—			(1,628	)		—			—
Net (loss) income		(133,056	)		706			(13,946	)		16,521			33,938			32,752			7,817
Accretion on preferred stock		(2,464	)		(2,760	)		—			(469	)		(498	)		(498	)		—
Net loss attributable to common stockholders	$	(135,520	)	$	(2,054	)	$	(13,946	)	$	16,052		$	33,440		$	32,254		$	7,817
Other Financial Data
Capital expenditures (excluding acquisitions)	$	4,411		$	5,902		$	19,119		$	8,212		$	11,183		$	6,185		$	7,962
Net cash provided by (used in) operating activities		22,915			30,378			(15,221	)		48,358			14,595			11,651			20,225
Net cash (used in) provided by investing activities		(6,273	)		(5,031	)		(26,093	)		(45,230	)		(223,242	)		26,424			(46,366	)
Net cash (used in) provided by financing activities		(6,040	)		(15,797	)		23,486			(1,132	)		241,253			(34,802	)		(1,395	)
EBITDA(1)		(100,920	)		30,389			30,112			48,331			44,449			23,362			42,947
EBITDA margin(1)		N/A			10.0	%		9.5	%		13.0	%		9.6	%		10.6	%		16.8	%
Adjusted EBITDA(1)	$	15,043		$	42,693		$	45,459		$	58,872		$	78,627		$	35,181		$	42,891
Adjusted EBITDA margin(1)		5.2	%		14.1	%		14.3	%		15.9	%		17.0	%		16.0	%		16.7	%

Notes

(1) We define EBITDA as net (loss) income before discontinued operations and the cumulative effect of a change in accounting principle as well as before depreciation, amortization and interest expenses and the provision for income taxes. EBITDA margin is EBITDA as a percentage of revenue. We prepare Adjusted EBITDA by adjusting EBITDA (each to the extent applicable in the appropriate period) for:

•  the change in fair value of an interest rate hedge;

•  reversal of a charge related to the decertification of a facility;

•  gains or losses on sale of assets;

•  provision for the impairment of long-lived assets;

•  the write off of deferred financing costs of extinguished debt;

•  reorganization expenses;

•  fees and expenses related to the Transactions; and

•  non-cash stock based compensations charges.

See “Non-GAAP Financial Measures” for a description of our uses, and the limitations associated with the use, of EBITDA and Adjusted EBITDA. The following table provides a reconciliation from our net income (loss) from continuing operations before the cumulative effect of a change in accounting

47

principle, which is the most directly comparable financial measure presented in accordance with generally accepted accounting principles for the periods indicated:

															Six Months Ended
	Year Ended December 31,														June 30,
	2001			2002			2003			2004		2005			2005			2006
	(In thousands)
Net (loss) income before discontinued operations and the cumulative effect of a change in accounting principle	$	(123,397	)	$	(2,145	)	$	(3,651	)	$	13,732	$	20,826		$	17,914		$	7,817
Plus
(Benefit from) provision for income taxes		(20,531	)		—			(1,645	)		4,421		(13,048	)		(10,279	)		5,672
Depreciation and amortization		16,018			7,947			8,069			8,597		9,991			4,966			7,247
Interest expense, net of interest income		26,990			24,587			27,339			21,581		26,680			10,761			22,211
EBITDA		(100,920	)		30,389			30,112			48,331		44,449			23,362			42,947
Change in fair value of interest rate hedge		—			—			1,006			926		165			152			(56	)
Reversal of charge related to decertification of a facility(a)		—			—			(2,734	)		—		—			—			—
Gain on sale of assets		—			—			—			—		(980	)		—			—
Provision for the impairment of long-lived assets(b)		111,176			—			—			—		—			—			—
Write-off of deferred financing costs of extinguished debt(c)		—			—			4,111			7,858		16,626			11,021			—
Reorganization expenses(d)		4,787			12,304			12,964			1,444		1,007			457			—
Expenses related to the Transactions(e)		—			—			—			—		7,572			—			—
Non-cash stock based compensation charge(f)		—			—			—			313		9,788			189			—
Adjusted EBITDA	$	15,043		$	42,693		$	45,459		$	58,872	$	78,627		$	35,181		$	42,891

Notes

(a)	In 2003, we reversed a charge recorded in 2000 related to a facility decertification from the Medicare and Medicaid programs. We appealed the decertification decision and in November 2002 reached a settlement for a recertification, resulting in the recovery of uncompensated care expenses in the amount of approximately $2.7 million.
(b)	Reflects a write off due to impairment of long-lived assets in connection with our Chapter 11 reorganization.
(c)	Reflects deferred financing costs that have been expensed in connection with the repayment of previously outstanding debt and deferred financing costs that were expensed upon repayment of our second lien senior secured term loan in connection with the Transactions.
(d)	Represents expenses incurred in connection with our Chapter 11 reorganization.
(e)	Represents (1) $0.2 million in fees paid by us in connection with the Transactions for valuation services and an acquisition audit; (2) our forgiveness in connection with the completion of the Transactions of a $2.5 million note issued to us in March 1998 by our then-Chairman of the Board, William Scott; and (3) a $4.8 million bonus award expense incurred in December 2005 upon the completion of the Transactions, pursuant to trigger event cash bonus agreements between us and our Chief Financial Officer, John King, and our Executive Vice President and President Ancillary Subsidiaries, Mark Wortley, in order to compensate them similarly to the economic benefit received by other executive officers who had previously purchased restricted stock.
(f)	Represents non-cash stock compensation charges incurred in connection with restricted stock granted to certain of our senior executives.

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															As of
	As of December 31,														June 30,
	2001			2002			2003			2004			2005		2006
	(In thousands)
Balance Sheet Data
Cash and cash equivalents	$	10,948		$	20,498		$	2,670		$	4,666		$	37,272	$	9,736
Working capital		(226,349	)		(208,421	)		(9,109	)		15,036			60,436		28,300
Property and equipment, net		149,389			147,720			157,146			192,397			191,151		214,913
Total assets		254,398			257,323			260,407			308,860			813,920		832,905
Revolving credit facilities		27,373			22,848			16,124			15,000			—		—
Long-term debt (including current portion)		212,793			201,558			237,916			265,885			463,309		461,934
Stockholders’ equity (deficit)		66,362			(69,440	)		(82,313	)		(50,475	)		222,865		230,457

49

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events and are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. See “Special Note Regarding Forward-Looking Statements” for a discussion of risks associated with reliance on forward-looking statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in “Risk Factors.” Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with “Selected Historical Consolidated Financial Data” and our consolidated financial statements and related notes included elsewhere in this prospectus.

Business Overview

We are a leading provider of integrated long-term healthcare services through our skilled nursing facilities and rehabilitation therapy business. We also provide other related healthcare services, including assisted living care and hospice care. We focus on providing high-quality care to our patients and we have a strong reputation for treating patients who require a high level of skilled nursing care and extensive rehabilitation therapy, whom we refer to as high-acuity patients. As of June 30, 2006, we owned or leased 60 skilled nursing facilities and 12 assisted living facilities, together comprising approximately 8,300 licensed beds. Our facilities, approximately 72% of which we own, are located in California, Texas, Kansas, Missouri and Nevada and are generally clustered in large urban or suburban markets. For the year ended December 31, 2005 and the six months ended June 30, 2006, our skilled nursing facilities, including our integrated rehabilitation therapy services at these facilities, generated approximately 86.8% and 85.9%, respectively, of our revenue from, with the remainder generated by our other related healthcare services.

In 2005 and the first six months of 2006, our revenue was $462.8 million and $256.4 million, respectively. To increase our revenue we focus on improving our skilled mix, which is the percentage of our patient population that is eligible to receive Medicare and managed care reimbursements. Medicare and managed care payors typically provide higher reimbursement than other payors because patients in these programs typically require a greater level of care and service. We have increased our skilled mix from 19.1% for 2003 to 24.0% for the first six months of 2006. Our high skilled mix also results in a high quality mix, which is our percentage of non-Medicaid revenues. We have increased our quality mix from 58.8% in 2003 to 68.4% for the first six months of 2006. In 2005, our net income before the cumulative effect of a change in accounting principle was $35.6 million, our EBITDA was $44.4 million and our Adjusted EBITDA was $78.6 million. In the first six months of 2006, our net income was $7.8 million and our EBITDA and Adjusted EBITDA were each $42.9 million. We define EBITDA and Adjusted EBITDA and provide a reconciliation of EBITDA and Adjusted EBITDA to net income from continuing operations before the cumulative effect of a change in accounting principle (the most directly comparable financial measure presented in accordance with United States generally accepted accounting principles) in footnote 2 to “Selected Consolidated Financial Data.” See “Non-GAAP Financial Measures” for a description of our use of, and the limitations associated with the use of, EBITDA and Adjusted EBITDA.”

We operate our business in two reportable operating segments: long-term care services, which includes the operation of skilled nursing and assisted living facilities and is the most significant portion of our business, and ancillary services, which include our rehabilitation therapy and hospice businesses. The “other” category includes general and administrative items and eliminations.

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Historical Overview

The Transactions

In December 2005, Onex Partners LP and Onex Corporation, together Onex, certain members of our management and Baylor Healthcare System, together the rollover investors, and other associates of Onex purchased our business in a merger for $645.7 million. Onex and the rollover investors funded the purchase price, related transaction costs and an increase of cash on our balance sheet with equity contributions of approximately $222.9 million, the issuance and sale of $200.0 million principal amount of our 11% senior subordinated notes and the incurrence and assumption of $259.4 million in term loan debt. As a result of the merger, we became a wholly-owned subsidiary of SHG Holding Solutions, Inc., or SHG Holding, and Onex, its affiliates and associates and the rollover investors held approximately 95% and 5%, respectively, of the outstanding capital stock of SHG Holding not including restricted stock issued to management at the time of the Transactions.

As a result of the merger, our assets and liabilities were adjusted to their estimated fair value as of the closing of the merger. The excess of total purchase price over the fair value of our tangible and identifiable intangible assets was allocated to goodwill in the amount of approximately $396.0 million, which will be subject to an annual impairment test. We refer to the transactions contemplated by the merger agreement, the equity contributions, the financings and use of proceeds of the financings, collectively, as the “Transactions.” We describe the Transactions in greater detail under “The Transactions.”

Acquisitions and Divestitures

From the beginning of 2003 through June 30, 2006, we have acquired or entered into long-term leases for 26 skilled nursing and assisted living facilities across four states. During this time period, we also sold one skilled nursing facility and one assisted living facility.

From September 2003 through December 2004, we acquired six skilled nursing facility capital leases with purchase options, four of which we have subsequently exercised, along with an operating lease for a new 190 bed skilled nursing facility in Summerlin, Nevada, near Las Vegas, Nevada. In December 2004, we acquired seven skilled nursing facilities and eight assisted living facilities in Kansas, which we refer to as the Vintage Park group of facilities, for $42.0 million in cash, our largest acquisition to date, and assumed operation of these facilities on January 1, 2005. As of June 30, 2006, the Vintage Park group of facilities had 828 licensed beds. The aggregate purchase price for our acquisitions between September 2003 and December 2004 was approximately $58.0 million.

In August 2005, we entered into agreements to sell an assisted living facility in California with 230 licensed beds and a skilled nursing facility in Texas with 119 licensed beds. The sale transactions were completed on October 14, 2005 and November 1, 2005, respectively, for an aggregate sales price of $4.6 million in cash.

On March 1, 2006, we purchased two skilled nursing facilities and one skilled nursing and residential care facility in Missouri for $31.0 million in cash, and on June 16, 2006, we purchased a long-term leasehold interest in a skilled nursing facility in Las Vegas, Nevada for $2.7 million in cash. These facilities added approximately 543 beds to our operations.

Discontinued Operations

On March 31, 2005, we completed the disposition of our California pharmacy business, which comprised two institutional pharmacies in southern California, in a sale to Kindred Pharmacy Services for approximately $31.5 million in cash. We continue to hold our joint venture interest in an institutional pharmacy in Austin, Texas. Our consolidated statements of income reflect our California pharmacy business, which we sold in March 2005, as discontinued operations.

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The following table sets forth selected financial data of our discontinued operations.

							Six Months
							Ended
	Year Ended December 31,						June 30,
	2003		2004		2005		2005
							(Unaudited)
	(In thousands)
Revenue	$	50,382	$	50,068	$	13,109	$	13,109
Income from discontinued operations, net of taxes		1,966		2,789		14,740		14,838

Reorganization under Chapter 11

On October 2, 2001, we and 19 of our subsidiaries filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, or the bankruptcy court. On November 28, 2001, our remaining three subsidiaries also filed voluntary petitions for protection under Chapter 11. From the date we filed the petition with the bankruptcy court through June 30, 2006, we incurred reorganization expenses totaling approximately $32.5 million.

Upon emerging from bankruptcy on August 19, 2003, we repaid or restructured all of our indebtedness in full, paying all accrued interest expenses and issuing 5.0% of our common stock to former holders of our then outstanding 111/4% senior subordinated notes.

The financial difficulties that led to our filing under Chapter 11 were caused by a combination of industry and company specific factors. Effective in 1997, the federal government fundamentally changed the reimbursement system for skilled nursing operators, which had a significant adverse effect on the cash flows of many providers, including us. Soon thereafter, we also began to experience significant industry-wide increases in our labor costs and professional liability and other insurance costs that adversely affected our operating results.

In early 2001, one of our facilities was temporarily decertified from the Medicare and Medicaid programs for alleged regulatory compliance reasons, causing a significant loss and delay in receipt of revenue at this facility. During this time, we were also subject to an unrelated significant adverse professional liability judgment. These events occurred as the amortization of principal payments on our then outstanding senior debt substantially increased. To preserve resources for our operations, we discontinued amortization payments on our senior debt and interest payments on our subordinated debt and began to negotiate with our lenders to restructure our balance sheet. Early in the fourth quarter of 2001, before we could reach an agreement with our lenders, the plaintiff in our professional liability litigation placed a lien on our assets, including our cash. With our ability to operate severely restricted, we filed for protection under Chapter 11. We were ultimately able to settle the professional liability claim for an amount that was fully covered by insurance proceeds.

Following our petition for protection under Chapter 11, we and our subsidiaries continued to operate our businesses as debtors-in-possession, subject to the jurisdiction of the bankruptcy court through August 19, 2003. While in bankruptcy we retained a new management team that:

•  emphasized quality of care;

•  recruited experienced facility level management and nursing staff;

•  accelerated revenue growth by improving census and payor mix by focusing on higher acuity patients;

•  managed corporate and facility level operating expenses by streamlining support processes and eliminating redundant costs;

•  expanded our corporate infrastructure by establishing a risk management team, legal department and human resources department; and

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•  implemented a new information technology system to provide rapid data delivery for management decision making.

Key Performance Indicators

We manage our business by monitoring certain key performance indicators that affect our revenue and profitability. The most important key performance indicators for our business are:

•  Skilled mix — the number of Medicare and managed care patient days at our skilled nursing facilities divided by the total number of patient days at our skilled nursing facilities for any given period.

•  EBITDA — net (loss) income before discontinued operations and the cumulative effect of a change in accounting principle as well as before depreciation, amortization and interest expenses and the provision for income taxes. Additionally, Adjusted EBITDA means EBITDA as adjusted for non-core operating items. See footnote 2 to “Selected Consolidated Financial Data” for an explanation of the adjustments and “Non-GAAP Financial Measures” for a description of our uses of, and the limitations associated with the use of, EBITDA and Adjusted EBITDA.

•  Average daily rates — revenue per patient per day for Medicare or managed care, Medicaid and private pay and other, calculated as total revenues for Medicare or managed care, Medicaid and private pay and other at our skilled nursing facilities divided by actual patient days for that revenue source for any given period.

•  Quality mix — the amount of non-Medicaid revenue from each of our business units as a percentage of total revenue. In most states, Medicaid is the least attractive payor source, as rates are generally the lowest of all payor types.

•  Occupancy percentage — the average daily ratio during a measurement period of the total number of residents occupying a bed in a skilled nursing facility to the number of available beds in the skilled nursing facility. During any measurement period, the number of licensed beds in a skilled nursing facility that are actually available to us may be less than the actual licensed bed capacity due to, among other things, bed decertifications.

•  Percentage of facilities owned — the number of skilled nursing facilities and assisted living facilities that we own as a percentage of the total number of facilities. We believe that our success is influenced by the level of ownership of the facilities we operate.

•  Average daily number of patients — the total number of patients at our skilled nursing facilities in a period divided by the number of days in that period.

•  Number of facilities and licensed beds — the total number of skilled nursing facilities and assisted living facilities that we own or operate and the total number of licensed beds associated with these facilities.

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The following table summarizes our key performance indicators, along with other statistics for each of the dates or periods indicated:

										Six Months Ended
	Year Ended December 31,									June 30,
	2003			2004			2005			2005			2006
	(Unaudited)									(Unaudited)
Occupancy statistics (skilled nursing facilities):
Available beds in service at end of period		6,234			6,293	(1)		6,848			6,954			7,442
Available patient days		2,155,279			2,282,681			2,529,782			1,258,674			1,288,446
Actual patient days		1,876,845			2,012,097			2,155,183			1,073,739			1,111,593
Occupancy percentage		87.1	%		88.1	%		85.2	%(2)		85.3	%(3)		86.3	%
Skilled mix		19.1	%		20.6	%		22.4	%		22.8	%		24.0	%
Average daily number of patients		5,142			5,498			5,905			5,932			6,141
EBITDA(4) (in thousands)	$	30,112		$	48,331		$	44,449		$	23,362		$	42,947
Adjusted EBITDA(4) (in thousands)	$	45,459		$	58,872		$	78,627		$	35,181		$	42,891
Revenue per patient day (skilled nursing facilities)
Medicare	$	362		$	394		$	434		$	425		$	446
Managed care		319			326			343			335			347
Medicaid		106			109			117			108			122
Private and other		120			127			134			131			143
Weighted average for all		156			167			187			180			198
Revenue from:
Medicare		33.8	%		35.8	%		36.3	%		38.0	%		36.7	%
Managed care and private pay		25.0			25.6			30.2			29.7			31.7
Quality mix		58.8			61.4			66.5			67.7			68.4
Medicaid		41.2			38.6			33.5			32.3			31.6
Total		100	%		100	%		100	%		100	%		100	%
Facilities:
Skilled nursing facilities (at end of period):
Owned		29			33			39			40			42
Leased		19			17			17			17			18
Total skilled nursing facilities		48			50			56			57			60
Total licensed beds		6,337			6,736			6,937			7,044			7,426
Assisted living facilities (at end of period):
Owned		2			2			10			10			10
Leased		3			3			2			3			2
Total assisted living facilities		5			5			12			13			12
Total licensed beds		700			700			822			1,058			807
Total facilities (at end of period)		53			55			68			70			72
Percentage owned facilities (at end of period)		58.5	%		63.6	%		72.1	%		71.4	%		72.2	%

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(1)	Excludes the Vintage Park group of facilities for which we acquired an operating lease on December 31, 2004 and began operations on January 1, 2005, and our Summerlin, Nevada facility that we acquired on September 30, 2004 and that was under construction for the remainder of 2004.
(2)	Occupancy percentage was 86.6% excluding Summerlin, Nevada, which was in start-up phase in 2005.
(3)	Occupancy percentage was 87.1% excluding Summerlin, Nevada, which was in start-up phase in 2005.
(4)	EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, or presented in accordance with, generally accepted accounting principles. We define EBITDA as net (loss) income before discontinued operations and the cumulative effect of a change in accounting principle as well as before depreciation, amortization and interest expenses and the provision for income taxes. See “Non-GAAP Financial Measures” for a description of our use of, and the limitations associated with the use of, EBITDA and Adjusted EBITDA. See “Selected Consolidated Financial Data” for a reconciliation to net income (loss) from continuing operations before the cumulative effect of a change in accounting principle, which is the most directly comparable financial measure presented in accordance with generally accepted accounting principles. We prepare Adjusted EBITDA by adjusting EBITDA (each to the extent applicable in the appropriate period) for:

•  the change in fair value of an interest rate hedge;

•  reversal of a charge related to the decertification of a facility;

•  gains or losses on sale of assets;

•  the write off of deferred financing costs of extinguished debt;

•  reorganization expenses;

•  fees and expenses related to the Transactions; and

•  non-cash stock based compensations charges.

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Revenue

Revenue by Service Offering

In our long-term care services segment we derive the majority of our revenue by providing skilled nursing care and integrated rehabilitation therapy services to residents in our network of skilled nursing facilities. In our ancillary services segment we derive revenue by providing related healthcare services, including our rehabilitation therapy services provided to third-party facilities and hospice care. The following table shows the percentage of our total revenue generated by each of these segments for the periods presented:

	Percentage Total Revenue
										Six Months Ended
	Year Ended December 31,									June 30,
	2003			2004			2005			2005			2006
										(Unaudited)
Long-term care services segment:
Skilled nursing facilities		92.2	%		90.8	%		86.8	%		87.7	%		85.9	%
Assisted living facilities		2.3			2.0			3.5			3.6			3.0
Total long-term care services segment		94.5			92.8			90.3			91.3			88.9
Ancillary services segment:
Third-party rehabilitation therapy services		5.6			7.1			9.2			8.3			10.8
Hospice		—			—			0.4			0.3			0.7
Total ancillary services segment		5.6			7.1			9.6			8.6			11.5
Other:		(0.1	)		0.1			0.1			0.1			(0.4	)
Total		100	%		100	%		100	%		100	%		100	%

Sources of Revenue

Long-term care services segment

Skilled Nursing Facilities.  Within our skilled nursing facilities, we generate our revenue from Medicare, Medicaid, managed care providers, insurers, private pay and other sources. We believe that our skilled mix is an important indicator of our success in attracting high-acuity patients because it represents the percentage of our patients who are reimbursed by Medicare and managed care, for whom we receive the most favorable reimbursement rates. Medicare and managed care payors typically do not provide reimbursement for custodial care, which is a basic level of healthcare.

The following table sets forth our Medicare, managed care, private pay/other and Medicaid patient days for our skilled nursing facilities as a percentage of total patient days for our skilled nursing facilities and the level of skilled mix for our skilled nursing facilities:

	Percentage Skilled Nursing Patient Days
										Six Months Ended
	Year Ended December 31,									June 30,
	2003			2004			2005			2005			2006
										(Unaudited)
Medicare		15.7	%		16.8	%		17.8	%		18.2	%		18.7	%
Managed care		3.4			3.8			4.6			4.6			5.3
Skilled mix		19.1			20.6			22.4			22.8			24.0
Private and other		15.0			14.0			16.2			16.0			16.6
Medicaid		65.9			65.4			61.4			61.2			59.4
Total		100	%		100	%		100	%		100	%		100	%

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Assisted Living Facilities.  Within our assisted living facilities, we generate our revenue primarily from private pay sources, with a small portion earned from Medicaid or other state specific programs.

Ancillary services segment

Rehabilitation Therapy.  As of June 30, 2006, we provided rehabilitation therapy services to a total of 153 facilities, 60 of which were our facilities and 93 of which were unaffiliated facilities. Rehabilitation therapy revenue derived from servicing our own facilities is included in our revenue from skilled nursing facilities. Our rehabilitation therapy business receives payment for services from skilled nursing facilities based on negotiated patient per diem rates or a negotiated fee schedule based on the type of service rendered.

Hospice.  We established our hospice business in 2004 and provided hospice care in Texas and California. We derive substantially all of the revenue from our hospice business from Medicare reimbursement for hospice services.

Regulatory and other Governmental Actions Affecting Revenue

We derive a substantial portion of our revenue from the Medicare and Medicaid programs. For the year ended December 31, 2005, we derived approximately 36.3% and 33.5% of our total revenue from the Medicare and Medicaid programs, respectively, and for the six months ended June 30, 2006, we derived approximately 36.7% and 31.6% of our total revenue from the Medicare and Medicaid programs, respectively. In addition, our rehabilitation therapy services, for which we receive payment from private payors, are significantly dependant of Medicare and Medicaid funding, as those private payors are often reimbursed by these programs.

Medicare.  Medicare is an exclusively federal program that primarily provides healthcare benefits to beneficiaries who are 65 years of age or older. It is a broad program of health insurance designed to help the nation’s elderly meet hospital, hospice, home health and other health care costs. Medicare coverage extends to certain persons under age 65 who qualify as disabled and those having end-stage renal disease.

Medicare reimburses our skilled nursing facilities under a prospective payment system, or PPS, for inpatient Medicare Part A covered services. Under the PPS, facilities are paid a predetermined amount per patient, per day, based on the anticipated costs of treating patients. The amount to be paid is determined by classifying each patient into a resource utilization group, or RUG, category that is based upon each patient’s acuity level. As of January 1, 2006, the RUG categories were expanded from 44 to 53, with increased reimbursement rates for treating higher acuity patients. The new rules also implemented a market basket increase that increased rates by 3.1% for fiscal year 2006. At the same time, Congress terminated certain temporary add on payments that were added in 1999 and 2000 as the nursing home industry came under financial pressure from prior Medicare cuts. Therefore, while Medicare payments to skilled nursing facilities were reduced by an estimated $1.02 billion because of the expiration of the temporary payment add-ons, this reduction was more than offset by a $510 million increase in payments resulting from the refined classification system and a $530 million increase resulting from updates to the payment rates in connection with the market basket index. While the fiscal year 2006 Medicare skilled nursing facility payment rates will not decrease payments to skilled nursing facilities, the loss of revenue associated with future changes in skilled nursing facility payments could, in the future, have an adverse impact on our financial condition or results of operation.

On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005, or DRA, which will reduce net Medicare and Medicaid spending by approximately $11 billion over five years. Under previously enacted federal law, caps on annual reimbursements for rehabilitation therapy became effective on January 1, 2006. The DRA provides for exceptions to those caps for patients with certain conditions or multiple complexities whose therapy is reimbursed under Medicare Part B and provided in 2006. The majority of the residents in our skilled nursing facilities and patients served by our rehabilitation therapy agencies whose therapy is reimbursed under Medicare Part B have qualified for these exceptions. Unless extended, these exceptions will expire on December 31, 2006.

On February 6, 2006, the Bush Administration released its fiscal year 2007 budget proposal, which would reduce Medicare spending by $2.5 billion in fiscal year 2007 and $35.9 billion over five years. The budget would, among other things, freeze payments in fiscal year 2007 to skilled nursing facilities and

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reduce payment updates for hospice services. To date, congressional resolutions have not included these reimbursement cuts, and these proposals would require legislation to be implemented. Both the DRA and the 2007 budget proposal may result in reduced Medicare funding for skilled nursing facilities and other providers. For 2007, as part of a market basket adjustment implemented for increased cost of living, Medicare payments to skilled nursing facilities will increase by an average of 3.1% over prior year rates.

Historically, adjustments to the reimbursement under Medicare have had a significant effect on our revenue. For a discussion of historic adjustments and recent changes to the Medicare program and related reimbursement rates see “Business — Sources of Reimbursement” and “Risk Factors — Risks Related to Our Business and Industry — We depend heavily on reimbursement from Medicare and Medicaid and payments from these payors may be reduced.”

Medicaid.  Medicaid is a state administered medical assistance program for the indigent, operated by the individual states with the financial participation of the federal government. Each state has relatively broad discretion in establishing its Medicaid reimbursement formulas, which must be approved by the federal government in accordance with federal guidelines. All states in which we operate provide long-term care services for individuals who are Medicaid eligible and qualify for institutional care. Medicaid payments are made directly to providers, who must accept the Medicaid reimbursement level as payment in full. Rapidly increasing Medicaid spending, combined with slow state revenue growth, has led many states to institute measures aimed at controlling spending growth. Given that Medicaid outlays are a significant component of state budgets, we expect continuing cost containment pressures on Medicaid outlays for skilled nursing facilities in the states in which we operate. In addition, the DRA limited the circumstances under which an individual may become financially eligible for Medicaid and nursing home services paid for by Medicaid. The following summarizes the Medicaid regime in the principal states in which we operate.

•  California.  In 2005, under State Assembly Bill 1629, California Medicaid, known as Medi-Cal, switched from a prospective payment system to a prospective cost-based system for free-standing nursing facilities that is facility specific based upon the cost of providing care at that facility. State Assembly Bill 1629 includes both a rate increase, as well as a quality assurance fee that is a provider tax. State Assembly Bill 1629 also effected a retroactive cost of living adjustment to its existing average reimbursement rate for the 2004/2005 rate year. The provider tax is a mechanism for states to obtain additional federal funding for the state’s Medicaid program. State Assembly Bill 1629 is scheduled to expire, with its prospective cost-based system and quality assurance fee becoming inoperative, on July 31, 2008, unless a later enacted statute extends this date.

•  Texas.  Texas has a prospective cost based system that is facility specific based upon patient acuity mix for that facility. In March 2006, Medicaid rates in Texas were increased approximately 11.75%, retroactively back to January 1, 2006.

•  Kansas/Missouri.  The Kansas and Missouri Medicaid reimbursement systems are prospective cost based and are case mix adjusted for resident activity levels.

•  Nevada.  Nevada’s reimbursement system is prospective cost based, adjusted for patient acuity mix and designed to cover all costs except those currently associated with property, return on equity, and certain ancillaries. Property cost is reimbursed at a prospective rate for each facility.

For additional information on the Medicaid program in the states in which we currently operate see “Business — Sources of Reimbursement.”

The U.S. Department of Health and Human Services has established a Medicaid advisory commission charged with recommending ways in which Congress can restructure the program and reduce Medicaid spending growth by up to $10 billion over five years. The commission is expected to issue its report by December 31, 2006.

Primary Expense Components

Operating

Operating expenses in our long-term care services segment primarily include salaries and benefits, supplies, purchased services, ancillary expenses such as the cost of pharmacy and therapy services provided

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to patients and residents, and expenses for general and professional liability insurance and other operating expenses of our skilled nursing and assisted living facilities. Operating expenses in our ancillary services segment primarily include salaries and benefits, supplies, purchased services and expenses for general and professional liability insurances and other operating expenses of our rehabilitation therapy and hospice businesses.

General and Administrative

General and administrative expenses are primarily salaries, bonuses and benefits and purchased services to operate our corporate offices. Also included in general and administrative expenses are expenses related to non-cash stock based compensation and professional fees, including accounting, financial audit and legal fees.

Non-Cash Stock Based Compensation.  Non-cash stock based compensation primarily relates to grants of our restricted stock. Effective March 8, 2004, we entered into restricted stock and employment agreements with four executive officers, Messrs. Hendrickson, Lynch, Rapp and our former Chief Financial Officer. Pursuant to these agreements we sold 70,661 shares of restricted and non-voting class B common stock to these executives for a purchase price of $0.05 per share, the then fair market value of the shares based upon an independent third-party appraisal. Of these shares, 4,930 shares owned by our former Chief Financial Officer were cancelled in September 2004 upon the termination of his service with us.

These shares of class B common stock were restricted by certain vesting requirements, our right to repurchase the shares and restrictions on the sale or transfer of such shares. These shares were subject to vesting, among other things, as follows:

•  Subject to the executive’s continuing service with us, the shares would vest in full upon the occurrence of a trigger event, which is defined as any asset sale, initial public offering or stock sale (each, a “liquidity event”), providing a terminal equity value of us in excess of $100.0 million. The consummation of the Transactions constituted a valid trigger event; and

•  If a trigger event had not occurred by the end of the original term of the executive’s employment agreement and such executive was still employed by us, 50% of his shares would vest if he had complied with the confidentiality and non-solicitation obligations in his employment agreement and we had achieved EBITDA in any one fiscal year of over $60.0 million.

We used the intrinsic value method in accordance with the Accounting Principles Board Opinion No. 25, or APB No. 25, to account for non-cash stock-based compensation associated with the restricted stock. Under this method, we did not recognize compensation cost upon the issuance of the restricted stock because the per share purchase price paid by each executive for the restricted shares was equal to the then per share fair market value. We were required to recognize deferred non-cash stock-based compensation in the period that the number of shares subject to vesting became probable and determinable, calculated as the difference between the fair value of such shares as estimated by our management at the end of the applicable period and the price paid for such shares by the executive. We amortized the deferred non-cash stock-based compensation over the probable vesting period, beginning with the date of issuance of the restricted stock.

In 2004, we determined that it was probable that 50% of the restricted shares would vest at the end of the original term of each executive’s employment agreement. For 2004, we recorded deferred non-cash stock-based compensation totaling $1.2 million, representing the difference between the estimated aggregate market value of our restricted stock as determined by our management on December 31, 2004 and the aggregate price paid for such restricted shares by the executives. We recorded related amortization of deferred non-cash stock-based compensation expense equal to $0.3 million in 2004 and $0.8 million in 2005.

Upon completion of the Transactions, the remainder of the restricted shares fully vested and we recognized $9.0 million of non-cash stock-based compensation expense, determined as the difference between the per share price paid in the merger and $0.05 per share (the per share price paid by the

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executives), multiplied by the number of restricted shares that were not previously determined to be probable to vest.

Cash Bonus Payments.  In April 2005, we entered into trigger event cash bonus Agreements with our Chief Financial Officer and our Executive Vice President and Vice President, Ancillary Services, to compensate them similarly to the economic benefit received by our other executive officers that were entitled to receive benefits under their respective restricted stock agreements upon the consummation of certain liquidity events. Subject to each of their continued employment through the closing of a trigger event, including the closing of the Transactions, these agreements entitled the officers to a cash bonus on the date of such closing equal to the product of (a) Skilled Healthcare Group’s terminal equity value determined as of the trigger event, plus aggregate cash dividends paid by Skilled Healthcare Group prior to such trigger event, multiplied by (b) the executive’s then effective ownership percentage. Upon the closing of the Transactions, pursuant to these agreements, our Chief Financial Officer and our Executive Vice President and Vice President, Ancillary Services, received a cash payment of $3.3 million, and $1.1 million, respectively.

Restricted Stock.  Effective December 27, 2005, SHG Holding entered into restricted stock agreements with our executive officers Messrs. Hendrickson, Lynch, King, Rapp and Wortley, under its Restricted Stock Plan in connection with each of our executive officers’ employment agreements. SHG Holding awarded 2,229 shares of restricted common stock to these executive officers and 244 shares of restricted common stock were issued to other employees. SHG Holding did not obtain contemporaneous valuations from an unrelated valuation specialist on this date, but based on the purchase price paid for its common stock by third parties in the Transactions, SHG Holding determined that the fair market value of each share of its common stock outstanding on December 27, 2005 was $100 per share. In the first quarter of 2006, SHG Holding issued 70 shares of restricted common stock to Susan Whittle, and in the second quarter of 2006, SHG Holding issued 70 shares of restricted common stock to Peter Reynolds. SHG Holding determined that the fair value of its restricted common stock continued to be $100 per share in each of the first and second quarters of 2006.

The shares of common stock awarded are restricted by certain vesting requirements, SHG Holding’s right to repurchase the shares and restrictions on the sale or transfer of such shares. SHG Holding’s board of directors may elect at any time to remove any or all of these restrictions. On the day of the grant, 25% of the restricted shares vested, and, subject to the employee’s continuing employment with SHG Holding or any of its subsidiaries, the remaining shares will vest 25% on each of the subsequent three anniversaries of the date of grant. If the employee ceases to be employed by SHG Holding or any of its subsidiaries, for any reason, the shares of restricted stock that have not previously vested are forfeited by the executive. In addition, all restricted shares will vest in the event that a third party acquires (i) enough of SHG Holding’s capital stock to elect a majority of its board of directors or (ii) all or substantially all of SHG Holdings and its subsidiaries’ assets. The recognition and measurement of restricted stock expense is accounted for under APB opinion No. 25.

Non-cash deferred compensation in respect of restricted stock issued at and after the Transactions is recognized by SHG Holding but does not affect our financial statements.

Performance Based Incentive Compensation  Our performance based incentive compensation plan for each of our operating segments provides for cash bonus payments that are intended to reflect the achievement of key operating measures, including quality outcomes, customer satisfaction, cash collections, efficient resource utilization and operating budget goals. We accrue bonus expense based on the ratable achievement of these operating measures.

Depreciation and Amortization

Depreciation and amortization relates to the ratable write-off of assets such as our owned buildings and equipment over their assigned useful lives as a result of wear and tear due to usage. Depreciation and

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amortization is computed using the straight-line method over the estimated useful lives of the assets as follows:

Buildings and improvements	15-40 years
Leasehold improvements	Shorter of the lease term or estimated useful life, generally 5-10 years
Furniture and equipment	3-10 years

Rent

Rent consists of lease amounts payable to third-party owners of skilled nursing facilities and assisted living facilities that we operate but do not own, as well as the lease on our approximately 26,433 square foot executive office building, which includes portions of the administrative functions for our rehabilitation therapy and hospice businesses. Rent does not include inter-company rents paid between wholly-owned subsidiaries.

Extraordinary Dividend Payment and Redemption of Preferred Stock

In June 2005, we entered into a new $420.0 million senior credit facility, consisting of (i) a $50.0 million first lien revolving credit facility, (ii) a $260.0 million first lien term loan and (iii) a $110.0 million second lien term loan. The proceeds of this financing were used to refinance our existing indebtedness, fully redeem our then outstanding series A preferred stock and pay a special dividend in the amount of $108.6 million to our then existing stockholders.

Other than the dividend payment referenced above, we paid no other dividends to our stockholders during 2005 and we do not intend to pay dividends in the foreseeable future. In July 2004, we redeemed all of our then outstanding preferred stock for an aggregate amount of $15.0 million.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements and related disclosures requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis we re-evaluate our judgments and estimates, including those related to doubtful accounts, income taxes and loss contingencies. We base our estimates and judgments on our historical experience, knowledge of current conditions and our belief of what could occur in the future considering available information, including assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these policies.

The following represents a summary of our critical accounting policies, defined as those policies that we believe: (a) are the most important to the portrayal of our financial condition and results of operations and (b) require management’s most subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Revenue recognition

Our revenue is derived primarily from our skilled nursing facilities, which includes our integrated rehabilitation therapy services at these facilities, with the remainder generated by our other related healthcare services. These services consist of our rehabilitation therapy services provided to third-party facilities, assisted living facilities and hospice care. In 2005, approximately 70% of our revenue was received from funds provided under Medicare and state Medicaid assistance programs. We also receive revenue from

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managed care providers and private pay patients. We record our revenue from these governmental and managed care programs on an accrual basis as services are performed at their estimated net realizable value under these programs. Our revenue from governmental and managed care programs is subject to audit and retroactive adjustment by governmental and third-party agencies. Retroactive adjustments that are likely to result from future audits by third-party payors are accrued on an estimated basis in the period the related services are performed. Consistent with the healthcare industry accounting practices, any changes to these governmental revenue estimates are recorded in the period the change or adjustment becomes known based on final settlements. Because of the complexity of the laws and regulations governing Medicare and state Medicaid assistance programs, our estimates may potentially change by a material amount. We record our revenue from private pay patients on an accrual basis as services are performed.

Allowance for doubtful accounts

We maintain allowances for doubtful accounts for estimated losses resulting from non-payment of patient accounts receivable and third-party billings and notes receivable from customers. We record a provision for doubtful accounts monthly using a percentage of revenue approach that reflects our historical experience and known facts associated with the receivable. In evaluating the collectibility of accounts receivable, we consider a number of factors, including the age of the accounts, changes in collection trends, the composition of patient accounts by payor the status of ongoing disputes with third-party payors and general industry conditions. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Our receivables from Medicare and Medicaid payor programs represent our only significant concentration of credit risk. We do not believe there are significant credit risks associated with these governmental programs. If, at June 30, 2006, we were to recognize an increase of 10% in the allowance for our doubtful accounts, our total current assets would decrease by $0.7 million, or 0.6%.

Patient liability risks

Our professional liability and general liability reserve includes amounts for patient care related claims and incurred but not reported claims. Professional liability and general liability costs for the long-term care industry have become increasingly expensive and difficult to estimate. The amount of our reserves is determined based on an estimation process that uses information obtained from both company-specific and industry data. The estimation process requires us to continuously monitor and evaluate the life cycle of the claims. Using data obtained from this monitoring and our assumptions about emerging trends, we, along with two independent actuaries, develop information about the size of ultimate claims based on our historical experience and other available industry information. The most significant assumptions used in the estimation process include determining the trend in costs, the expected cost of claims incurred but not reported and the expected costs to settle unpaid claims. Although we believe that our reserves are adequate, it is possible that this liability will require a material adjustment in the future. If, at June 30, 2006, we were to recognize an increase of 10.0% in the reserve for professional liability and general liability, our total liabilities would be increased by $3.8 million, or 0.6%.

Impairment of long-lived assets

We periodically evaluate the carrying value of our long-lived assets other than goodwill, primarily consisting of our investments in real estate, for impairment indicators. If indicators of impairment are present, we evaluate the carrying value of the related real estate investments in relation to the future discounted cash flows of the underlying operations to assess recoverability of the assets. Measurement of the amount of the impairment, if any, may be based on independent appraisals, established market values of comparable assets or estimates of future cash flows expected. The estimates of these future cash flows are based on assumptions and projections believed by management to be reasonable and supportable. They require management’s subjective judgments and take into account assumptions about revenue and expense growth rates. These assumptions may vary by type of long-lived asset. As of June 30, 2006, none of our long-lived assets were impaired.

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Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for as purchases. In accordance with SFAS No. 142, Goodwill and other Intangible Assets, goodwill is not amortized, but instead is subject to impairment tests performed at least annually, or between annual testing upon the occurrence of an event or change in circumstances that would reduce the fair value of a reporting unit below its carrying amount. For goodwill, the test is performed at the reporting unit level as defined by SFAS No. 142. If we find that the carrying value of goodwill is to be impaired, we must reduce the carrying value to fair value. We believe that our determination not to recognize an impairment loss on our long-lived assets and goodwill is a critical accounting estimate because this determination is susceptible to change, dependent upon events that are remote in time and may or may not occur and because recognizing an impairment loss could result in a material reduction of the assets reported on our balance sheet. As of June 30, 2006, the carrying value of goodwill and intangible assets was approximately $443.1 million. This goodwill and intangible assets results primarily from the excess of the purchase price over the net identifiable assets in the Transactions. There were no impairment charges recorded against goodwill in 2005 or 2004. In connection with the Transactions, we recorded goodwill of approximately $396.0 million and recorded other intangible assets of approximately $35.8 million.

Deferred Financing Costs

Deferred financing costs are costs related to fees and expenses associated with our issuances of debt the deferred financing costs at June 30, 2006 substantially relate to our first lien secured credit agreement and are being amortized over the maturity period using an effective-interest method. At June 30, 2006 deferred financing costs, net of amortization, were approximately $16.8 million. In connection with the Transactions, we expensed approximately $2.3 million of deferred financing costs related to our previously outstanding second lien senior secured term loan, which was repaid in connection with the Transactions, and capitalized approximately $11.4 million of fees and expenses related to the Transactions.

Deferred Tax Assets

We determine deferred tax assets and liabilities at the balance sheet date based upon the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income.

Our temporary differences are primarily attributable to purchase accounting, accrued professional liability expenses, asset impairment charges associated with our 2001 write-down of asset values under FAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets Disposed Of, accelerated tax depreciation, our provision for doubtful accounts and accrued compensatory benefits.

We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and unless we believe that recovery is more likely than not, we establish a valuation allowance to reduce the deferred tax assets to the amounts expected to be realized. We periodically review the adequacy of the valuation allowance and recognize these benefits if a reassessment indicates that it is more likely than not that these benefits will be realized. In addition, we evaluate our tax contingencies and recognize a liability when we believe that it is probable that a liability exists.

The ultimate realization of deferred tax assets is dependent upon the amount of future taxable income during the periods in which temporary differences become deductible.

In 2001, due to the uncertainty regarding whether our deferred tax assets would be realized, we established a full valuation allowance against our net deferred tax assets. In 2001 and 2003, we incurred net losses and accordingly our net deferred tax assets increased to $32.7 million as of December 31, 2003. Due to our bankruptcy and our financial performance in 2001, 2002 and 2003, we continued to apply a full valuation allowance against our net deferred tax assets. We were profitable in 2004 and were accordingly able to utilize all of our tax net operating loss carryforwards. As a result, we reduced the valuation

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allowance against our net deferred tax assets by $6.2 million but maintained a valuation allowance of $26.5 million at December 31, 2004 against our remaining deferred net tax assets. In 2005, due to increased profitability, the gain on the sale of our two California-based institutional pharmacies and management’s evaluation of our projected financial performance, we determined that it was more likely than not that we would be able to utilize a significant portion of our net deferred tax assets as they become deductible in future periods. Therefore, during 2005 we offset our income tax expense with a reduction in our valuation allowance of $25.2 million. At June 30, 2006, our remaining valuation allowance for net deferred tax assets totaled $1.3 million.

We make our estimates and judgments regarding deferred tax assets and the associated valuation allowance, if any, based on, among other things, knowledge of operations, markets, historical trends and likely futures changes and, when appropriate, the opinions of advisors with knowledge and expertise in certain fields. However, due to the nature of certain assets and liabilities, there are risks and uncertainties associated with some of our estimates and judgments. Actual results could differ from these estimates under different assumptions or conditions.

Discontinued Operations

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, or SFAS No. 144, addresses the accounting for and disclosure of long-lived assets to be disposed of by sale. Under SFAS No. 144, when a long-lived asset or group of assets meets defined criteria, the long-lived assets are measured and reported at the lower of their carrying value or fair value less costs to sell, and are classified as held for sale on the consolidated balance sheet. In addition, the related operations of the long-lived assets are reported as discontinued operations in the consolidated statements of operations with all comparable periods reclassified. Our consolidated statements of operations have been reclassified to reflect our California pharmacy business, which we sold in March 2005, as discontinued operations.

Accounting for Conditional Asset Retirement Obligations

We adopted Financial Accounting Standards Board, or FASB, Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143,” or FIN No. 47, effective December 31, 2005 and recorded a liability of $5.0 million, of which $1.6 million was recorded as a cumulative effect of a change in accounting principle, net of tax benefit and related valuation allowance. Substantially all of the impact of adopting FIN No. 47 relates to estimated costs to remove asbestos that is contained within our facilities.

We have determined that a conditional asset retirement obligation exists for asbestos remediation. Though not a current health hazard in our facilities, upon renovation we may be required to take the appropriate remediation procedures in compliance with state law to remove the asbestos. The removal of asbestos-containing materials includes primarily floor and ceiling tiles from our pre-1980 constructed facilities. The fair value of the conditional asset retirement obligation was determined as the present value of the estimated future cost of remediation based on an estimated expected date of remediation. This computation is based on a number of assumptions which may change in the future based on the availability of new information, technology changes, changes in costs of remediation, and other factors.

The determination of the asset retirement obligation is based upon a number of assumptions that incorporate our knowledge of the facilities, the asset life of the floor and ceiling tiles, the estimated timeframes for periodic renovations which would involve floor and ceiling tiles, the current cost for remediation of asbestos and the current technology at hand to accomplish the remediation work. These assumptions to determine the asset retirement obligation may be imprecise or be subject to changes in the future. Any change in the assumptions can impact the value of the determined liability and impact our future earnings.

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Operating Leases

We account for operating leases in accordance with SFAS No. 13, “Accounting for Leases,” and FASB Technical Bulletin 85-3, “Accounting for Operating Leases with Scheduled Rent Increases.” Accordingly, rent expense under our facilities’ and administrative offices operating leases is recognized on a straight-line basis over the original term of each facility’s and administrative office’s leases, inclusive of predetermined rent escalations or modifications and including any lease renewal options.

Recent Accounting Standards

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of SFAS No. 109, or FIN No. 48. FIN No. 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. Management is in the process of evaluating the impact on us of adopting FIN No. 48.

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Results of Operations

The following table sets forth details of our revenue and earnings as a percentage of total revenue for the periods indicated:

	Year Ended									Six Months Ended
	December 31,									June 30,
	2003			2004			2005			2005			2006
										(Unaudited)
Revenue		100	%		100	%		100	%		100	%		100	%
Expenses:
Operating		77.7			75.8			75.0			75.5			74.4
General and administrative		5.9			6.7			9.4			6.7			7.3
Depreciation and amortization		2.5			2.3			2.2			2.3			2.8
Rent		2.4			2.2			2.2			2.3			1.9
		88.5			87.0			88.8			86.8			86.4
Income (loss) before other expenses, income taxes, discontinued operations and cumulative effect of a change in accounting principle		11.5			13.0			11.2			13.2			13.6
Other income (expenses):
Interest expense		(8.7	)		(6.0	)		(6.0	)		(5.0	)		(8.9	)
Interest income and other		—			0.2			0.2			0.2			0.2
Change in fair value of interest rate hedge		(0.3	)		(0.2	)		—			(0.1	)		—
Equity in earnings of joint venture		0.4			0.5			0.4			0.4			0.3
Reversal of charge related to decertification of a facility		0.9			—			—			—			—
Write-off of deferred financing costs		(1.3	)		(2.1	)		(3.6	)		(5.0	)		—
Forgiveness of stockholder loan		—			—			(0.5	)		—			—
Reorganization expenses		(4.1	)		(0.4	)		(0.2	)		(0.2	)
Provision for the impairment of long-lived assets		—			—			—			—			—
(Gain) loss on sale of assets		—			—			0.2			—			—
Total other income (expenses), net		(13.1	)		(8.0	)		(9.5	)		(9.7	)		(8.4	)
Income before income taxes, discontinued operations and the cumulative effect of a change in accounting principle		(1.6	)		5.0			1.7			3.5			5.2
(Benefit from) provision for income taxes		(0.5	)		1.2			(2.8	)		(4.7	)		2.2
(Loss) income before discontinued operations and the cumulative effect of a change in accounting principle		(1.1	)		3.8			4.5			8.2			3.0
Income from discontinued operations, net of taxes		0.6			0.7			3.2			6.7			—
Cumulative effect of a change in accounting principle		(3.9	)		—			(0.4	)		—			—
Net (loss) income		(4.4	)%		4.5	%		7.3	%		14.9	%		3.0	%
EBITDA margin(1)		9.5	%		13.0	%		9.6	%		10.6	%		16.8	%
Adjusted EBITDA margin(1)		14.3	%		15.9	%		17.0	%		16.0	%		16.7	%

(1) See footnote 2 to “Selected Historical Consolidated Financial Data” for a calculation of EBITDA and Adjusted EBITDA. See “Non-GAAP Financial Measures” for a description of our uses of, and the limitations associated with the use of, EBITDA and adjusted EBITDA.

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Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005

Revenue.  Revenue increased $36.0 million, or 16.3%, to $256.4 million for the six months ended June 30, 2006 from $220.4 million for the six months ended June 30, 2005.

Revenue in our long-term care services segment, comprising skilled nursing and assisted living facilities, increased $26.7 million, or 13.2%, to $228.0 million in the six months ended June 30, 2006 from $201.3 million in the six months ended June 30, 2005. The increase in long-term care services segment revenue resulted from a $27.1 million, or 14.0%, increase in skilled nursing facilities revenue, partially offset by a $0.4 million, or 5.4%, decrease in assisted living facilities revenue. Of the increase in skilled nursing facilities revenue, $20.3 million resulted from increased reimbursement rates from Medicare, Medicaid, managed care and private pay sources, as well as a higher patient acuity mix. The remaining $6.8 million of the increase in skilled nursing facilities revenue resulted from increased occupancy. Our average daily Medicare rate increased 4.9% to $446 in the six months ended June 30, 2006 from $425 in the six months ended June 30, 2005 as a result of market basket increases provided under the Medicare program, as well as a shift to higher-acuity Medicare patients. Our average daily Medicaid rate increased 13.0% to $122 in the six months ended June 30, 2006 from $108 in the six months ended June 30, 2005, primarily due to increased Medicaid rates in California and Texas. Our managed care and private and other rates increased by approximately 3.5% and 8.6%, respectively, in the six months ended June 30, 2006 as compared to the six months ended June 30, 2005. Our skilled mix increased to 24.0% in the six months ended June 30, 2006 from 22.8% for the six months ended June 30, 2005 as we continued marketing our capabilities to referral sources to attract high-acuity patients to our facilities and recent regulatory changes limited the type of patient that can be admitted to certain higher-cost post-acute care facilities. Our average daily number of patients increased by 209, or 3.5%, to 6,141 in the six months ended June 30, 2006 from 5,932 in the six months ended June 30, 2005 due to our acquisition of three facilities in Missouri in the first quarter of 2006 that contributed 259 average daily patients, partially offset by a decline in occupancy levels, primarily in Medicaid.

Revenue in our ancillary services segment increased $10.6 million, or 56.3%, to $29.5 million in the six months ended June 30, 2006, compared to $18.9 million in the six months ended June 30, 2005. The increase in our ancillary segment revenue resulted from a $9.3 million, or 51.0%, increase in our rehabilitation therapy services revenue and a $1.3 million, or 221.3%, increase in our hospice business revenue. Of the $9.3 million increase in rehabilitation therapy services revenue, $8.6 million resulted from an increase in the number of rehabilitation therapy contracts with third-party facilities and $0.7 million resulted from increased services under existing third-party contracts. Increased services under existing third-party contracts primarily resulted from increases in volume at the facilities and, to a lesser extent, the timing of contract execution during the periods, with most contracts entered into during the first six months of 2005 being in effect for the full six months ended June 30, 2006.

Operating Expenses.  Our operating expenses increased $24.2 million, or 14.5%, to $190.7 million, or 74.4% of revenue, in the six months ended June 30, 2006 from $166.5 million, or 75.5% of revenue, in the six months ended June 30, 2005.

Operating expenses for our long-term care services segment increased $17.8 million, or 11.2%, to $176.3 million, or 77.3% of revenue, in the six months ended June 30, 2006 from $158.5 million, or 78.7% of revenue, in the six months ended June 30, 2005.

The increase in long-term care services segment operating expense resulted from a $18.4 million, or 12.0%, increase in operating expenses at our skilled nursing facilities and a $0.6 million, or 11.2% decrease in operating expenses at our assisted living facilities.

Of the increase in operating expenses at our skilled nursing facilities, $13.1 million resulted from operating costs per patient day increasing $12 per day, or 8.5%, from $142 per day in the six months ended June 30, 2005 to $154 per day in the six months ended June 30, 2006, and $5.3 million resulted from increased occupancy. The $13.1 million increase in operating costs associated with increased operating costs per patient day primarily resulted from a $4.9 million increase in labor costs due to an average hourly rate

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increase of 4.2% and increased staffing, primarily in the nursing area to respond to increased acuity levels, a $3.8 million increase in ancillary expenses such as pharmacy and therapy costs due to an increase in the mix of higher acuity patients, a $3.0 million increase in expense due to implementation in August 2005 of a provider tax on skilled nursing facilities in California as a result of State Assembly Bill 1629, and increases in other expenses, such as supplies, food, taxes and licenses, insurance and utilities of $1.4 million, due to increased purchasing costs. The increase in occupancy resulted in increased operating costs of $5.3 million, in which the average daily number of patients increased by 209 to 6,141 in the six months ended June 30, 2006 from 5,932 in the six months ended June 30, 2005. This increase was due to our acquisition of three facilities in Missouri in the first quarter of 2006 that contributed 259 average daily patients, partially offset by a decline in occupancy levels at our other existing facilities, primarily in Medicaid.

Operating expenses in our ancillary services segment, prior to any intercompany eliminations, increased $11.2 million, or 39.0%, to $39.9 million, or 74.3% of revenue from both internal and external customers, in the six months ended June 30, 2006 from $28.7 million, or 72.3% of revenue from both internal and external customers, in the six months ended June 30, 2005. The increase in ancillary services segment operating expenses resulted from a $10.0 million, or 35.7%, increase in operating expenses related to our rehabilitation therapy services business to $38.0 million, or 73.4% of revenue from both internal and external customers, in the six months ended June 30, 2006 from $28.0 million, or 71.4% of revenue from both internal and external customers, in the six months ended June 30, 2005, and a $1.2 million, or 147.3%, increase in operating expenses related to our hospice business. The increase in operating expenses in our rehabilitation therapy services business resulted from the increased activity under third-party rehabilitation therapy contracts discussed above. The increase in hospice operating costs related to the increase in hospice revenue of 221.3%.

General and Administrative Services Expenses.  Our general and administrative services expenses increased $3.8 million, or 26.0%, to $18.6 million, or 7.3% of revenue, in the six months ended June 30, 2006 from $14.8 million, or 6.7% of revenue, in the six months ended June 30, 2005. The increase in our general and administrative expenses resulted from increased compensation and benefits of $1.9 million as we added administrative service personnel, as well as our accrual for performance-based incentive programs. Professional fees also increased $1.2 million in 2006, primarily in the areas of accounting and audit services and legal fees incurred in preparation of becoming a public reporting company. Other expenses increased $0.7 million.

Depreciation and Amortization.  Depreciation and amortization increased by $2.2 million, or 45.9%, to $7.2 million in the six months ended June 30, 2006 from $5.0 million in the six months ended June 30, 2005. This increase primarily resulted from a $1.6 million amortization of intangible assets that were recorded as part of the Onex Transaction. The remaining $0.6 million was related to additional depreciation expense arising from our acquisition of three facilities in Missouri in March 2006 and our incurrence of routine capital expenditures.

Interest Expense, Net of Interest Income and Other.  Interest expense, net of interest income and other, increased by $11.4 million, or 106.4%, to $22.2 million in the six months ended June 30, 2006 from $10.8 million in the six months ended June 30, 2005. This increase resulted from an increased debt balance of $79.8 million, the net proceeds of which were used to fund a $108.6 million dividend paid to our stockholders, redeem our series A preferred stock in June 2005 for $15.0 million, and the balance related to the Onex Transaction, including the pre-funding of our Missouri acquisition.

Write-off of Deferred Financing Cost.  Write-off of deferred financing costs was $11.0 million in the six months ended June 30, 2005. There was no corresponding amount in the six months ended June 30, 2006. The write-off of the deferred financing costs in the six months ended June 30, 2005 resulted from the write-off of capitalized deferred financing costs associated with the refinancing in June 2005 of our then existing first lien senior secured credit facility and second lien senior secured credit facility.

Provision for (Benefit from) Income Taxes.  During the six months ended June 30, 2005, we recognized a tax benefit of approximately $10.3 million related to the $13.4 million reversal of a portion of a valuation allowance previously provided, partially offset by a $3.1 million tax provision on continuing

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operations. For the six months ended June 30, 2006, we recognized tax expense of $5.7 million of which $5.5 million related to the tax provision on operating income and $0.2 million related to adjustments made to tax reserves.

Discontinued Operations, Net of Tax.  Discontinued operations, net of tax was $14.8 million in the six months ended June 30, 2005. There were no comparable amounts in the six months ended June 30, 2006.

Net Income.  Net income decreased by $25.0 million, or 76.1%, to $7.8 million for the six months ended June 30, 2006 from $32.8 million for the six months ended June 30, 2005.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Revenue.  Revenue increased $91.5 million, or 24.7%, to $462.8 million in 2005 from $371.3 million in 2004.

Revenue in our long-term care services segment increased $73.6 million, or 21.4%, to $418.0 million in 2005 from $344.4 million in 2004. The increase in long-term care services segment revenue resulted from a $65.0 million, or 19.3%, increase in our skilled nursing facilities revenue and an $8.6 million, or 115.9%, increase in our assisted living facilities revenue. Of the increase in skilled nursing facilities revenue, $41.0 million resulted from increased reimbursement rates from Medicare, Medicaid, managed care and private pay sources, as well as a higher patient acuity mix. The remaining $24.0 million of the increase in skilled nursing facilities revenue resulted from increased occupancy. Our average daily Medicare rate increased 10.2% to $434 in 2005 from $394 in 2004 as a result of increased reimbursement rates and a shift to higher-acuity Medicare patients. Our average daily Medicaid rate increased 7.3% to $117 in 2005 from $109 per day in 2004, primarily due to our recognition in August 2005 of increased revenue in connection with a retroactive cost of living increase provided for under the Medi-Cal reimbursement system, which related to services we provided in 2004 and 2005. Our managed care and private and other rates increased by approximately 5.2% and 5.0% respectively in 2005 compared to 2004. Our skilled mix increased to 22.4% in 2005 from 20.6% in 2004 as we continued marketing our capabilities to referral sources to attract high-acuity patients to our facilities and recent regulatory changes limited the type of patient that can be admitted to certain higher-cost post-acute care facilities. Our average daily number of patients increased by 407, or 7.4%, to 5,905 in 2005 from 5,498 in 2004, primarily associated with our acquisition of the Vintage Park group of facilities at the end of 2004 and the development of our Summerlin, Nevada facility start-up. The increase in revenue in our assisted living facilities resulted from an increase in the average daily number of patients, primarily due to our acquisition of the Vintage Park group of facilities on December 31, 2004.

Revenue in our ancillary services segment increased $18.0 million, or 68.2%, to $44.5 million in 2005 compared to $26.5 million in 2004. The increase in our ancillary services segment revenue resulted from a $16.2 million, or 61.2%, increase in rehabilitation therapy services revenue and a $1.8 million increase in our hospice business revenue. We initiated our hospice business in 2005 and accordingly did not generate hospice revenue in 2004. Of the $16.2 million increase in rehabilitation therapy services revenue, $9.4 million resulted from an increase in the number of rehabilitation therapy contracts with third-party facilities and $6.8 million resulted from increased services under existing third-party contracts. Increased services under existing third-party contracts, primarily resulted from increases in volume at the facilities and, to a lesser extent, the timing of contract execution during the periods, with most contracts entered into during 2004 being in effect for all of 2005.

Operating Expenses.  Our operating expenses increased $65.8 million, or 23.4% to $347.2 million, or 75.0% of revenue, in 2005 from $281.4 million, or 75.8% of revenue, in 2004.

Operating expenses for our long-term care services segment increased $57.2 million, or 21.4%, to $324.7 million, or 77.7% of revenue, in 2005 from $267.5 million, or 77.7% of revenue, in 2004.

The increase in long-term care services segment operating expense resulted from a $52.1 million, or 19.9%, increase in operating expenses at our skilled nursing facilities and a $5.1 million, or 83.1%, increase in operating expenses at our assisted living facilities.

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Of the increase in operating expenses at our skilled nursing facilities, $33.5 million resulted from operating cost per patient day increasing $16, or 12.3%, to $146 per day in 2005 from $130 per day in 2004, and $18.6 million resulted from increased occupancy. The $33.5 million increase in operating costs primarily resulted from a $12.4 million increase in ancillary expenses, such as pharmacy and therapy costs, due to an increase in the mix of higher acuity patients, a $7.8 million increase in labor costs as a result of a 4.9% increase in average hourly rates and increased staffing, primarily in the nursing area, to respond to the increased mix of high-acuity patients, a $5.6 million increase due to implementation in August 2005 of a provider tax on skilled nursing facilities in California as a result of State Assembly Bill 1629, and a $7.7 million increase in other expenses, such as supplies, food, taxes and licenses, insurance and utilities, due to increased purchasing costs.

The average daily number of patients increased 407 to 5,905 in 2005 from 5,498 in 2004. This increase was due to our acquisition of seven facilities as of December 31, 2004, partially offset by the divestiture of one facility, and the increase in the census at our existing facilities.

The $5.1 million increase in our assisted living facilities operating expense resulted from an increase in the average daily number of patients, primarily due to our acquisition of the Vintage Park group of facilities on December 31, 2004.

Operating expenses in our ancillary services segment, prior to any intercompany eliminations, increased $21.7 million, or 49.0%, to $66.0 million, or 75.2% of revenue, in 2005 from $44.3 million, or 78.0% of revenue, in 2004. The increase in our ancillary services segment operating expenses resulted from a $20.1 million, or 45.9%, increase in operating expenses related to our rehabilitation therapy services to $63.9 million, or 74.5% of revenue, in 2005 from $43.8 million, or 77.2% of revenue, in 2004, and a $1.6 million increase in operating expenses related to our hospice business. The increased operating expenses related to our rehabilitation therapy business were incurred to support the increased rehabilitation therapy services revenue resulting from the increased activity under rehabilitation therapy contracts discussed above. The operating expenses related in our hospice business resulted from the initiation of our hospice business in early 2005.

General and Administrative Services Expenses.  Our general and administrative services expenses increased $18.6 million, or 75.5%, to $43.3 million, or 9.4% of revenue, in 2005 from $24.7 million, or 6.7% of revenue, in 2004. This increase was primarily related to the payment of cash bonuses in connection with the completion of the Transactions and non-cash stock-based compensation expense recognized in 2005. We expensed bonuses of $4.8 million in connection with the achievement of pre-established terms that were satisfied by the successful conclusion of the Transactions. We also incurred $9.8 million in non-cash stock-based compensation. This increase was due to a charge of $9.0 million for the value of restricted stock that became determinable upon the completion of the Transactions and $0.8 million expensed in 2005, which consisted of normal amortization of the non-cash stock based compensation established in the prior year. The remaining $4.0 million increase in general and administrative expense in 2005 as compared to 2004 resulted from a $2.4 million increase in selling and administrative services in our therapy business unit to acquire and support new business relations and increased compensation and benefits of $1.3 million for additional regional long-term care overhead personnel to support our growth into new markets. The remainder of the increase is due to higher professional fees paid, primarily in information technology consulting.

Depreciation and Amortization.  Depreciation and amortization increased by $1.4 million, or 16.2%, to $10.0 million in 2005 from $8.6 million in 2004. This increase primarily resulted from increased depreciation in connection with our acquisition of the Vintage Park group of facilities on December 31, 2004 and increased capital expenditures that we made in 2005 in connection with our Express Recovery^tm units.

Rent.  Rent increased by $2.0 million, or 23.2%, to $10.3 million in 2005 from $8.3 million in 2004, of which $1.3 million was related to rent expense associated with our Summerlin, Nevada facility acquired in late 2004 and $0.7 million was related to rent increases at two facilities in late 2004 and one facility in early 2005 upon renewal of expiring lease contracts.

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Interest Expense, Net of Interest Income and Other.  Interest expense, net of interest income, increased by $5.1 million, or 23.6%, to $26.7 million in 2005 from $21.6 million in 2004, primarily due to an increase in the principal amount of outstanding debt, the net proceeds of which were used to fund a $108.6 million dividend paid to our stockholders in June 2005.

Write-off of Deferred Financing Cost.  Write-off of deferred financing costs increased by $8.7 million to $16.6 million in 2005 from $7.9 million in 2004, primarily due to the write-off of deferred financing costs that we had capitalized in connection with the repayment of our $110.0 million second lien senior secured term loan in December 2005 as part of the Transactions.

Forgiveness of Shareholder Loan.  The $2.5 million forgiveness of shareholder loan expense in 2005 represents the principal amount of a note issued to us in March 1998 by William Scott, a member of our board of directors, that we forgave in connection with the completion of the Transactions. There was no corresponding amount in 2004.

Gain on Sale of Assets.  The $1.0 million gain on the sale of assets in 2005 resulted from our sale of an owned 119 bed skilled nursing facility in Texas and a leased 230 bed assisted living facility in California.

Provision for (Benefit from) Income Taxes.  The benefit from income taxes from continuing operations was $13.0 million in 2005, due primarily to the approximately $25.2 million reversal of significantly all of the remaining valuation allowance previously provided, partially offset by non-cash stock-based compensation associated with restricted stock and prior year reorganization expenses of approximately $12.2 million. The provision for income taxes from continuing operations was $4.4 million in 2004, due primarily to the reversal of a portion of the valuation allowance attributable to the utilization of our net operating loss carryforwards in 2004 of $6.2 million, offset by charges for prior year reorganization expenses, dividends on our previously outstanding series A preferred shares and the provision for taxes on continuing operations, which combined to total approximately $10.6 million.

Discontinued Operations, Net of Tax.  Discontinued operations, net of tax increased by $11.9 million to $14.7 million in 2005, compared to $2.8 million in 2004. In March 2005, we sold our California based institutional pharmacy business to Kindred Pharmacy Services for approximately $31.5 million in cash, and used the proceeds of the sale to repay then outstanding indebtedness. The results of operations for these assets have been classified as discontinued operations and are not included in the results of operations for 2005 or 2004. The gain on the sale of the pharmacy business is included in 2005.

Cumulative Effect of Change in Accounting Principle.  In 2005, we recorded the cumulative effect of a change in accounting principle of $1.6 million, net of tax, as a result of our adoption of Financial Accounting Standards Board Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations.

Net Income.  Net income increased by $17.4 million, or 105.4%, to $33.9 million in 2005 from $16.5 million in 2004.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Revenue.  Revenue increased $54.4 million, or 17.1%, to $371.3 million in 2004 from $316.9 million in 2003.

Revenue in our long-term care services segment increased $44.9 million, or 15.0%, to $344.4 in 2004 from $299.5 million in 2003. The increase in long-term care services segment revenue resulted from a $44.7 million, or 15.3%, increase in our skilled nursing facilities revenue and a $0.2 million, or 3.1%, increase in our assisted living facilities revenue. Of the increase in skilled nursing facilities revenue, $23.6 million resulted from increased Medicare, Medicaid, managed care and private pay reimbursement rates as well as a higher patient acuity mix. The remaining $21.1 million of the increase in skilled nursing facilities revenue resulted from increased occupancy. Our average daily Medicare rate increased 8.8% to $394 in 2004 from $362 in 2003 as a result of increased reimbursement rates and a shift to higher-acuity Medicare patients. Our average daily Medicaid rate increased 2.8% to $109 per day in 2004 from $106 per

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day in 2003 as a result of increased Texas Medicaid rates that were implemented in the third quarter of 2003 being in effect for all of 2004. Our managed care and private and other rates increased by approximately 2.2% and 5.8%, respectively, in 2004 as compared to 2003. Our skilled mix increased to 20.6% in 2004 from 19.1% in 2003 as we continued marketing our capabilities to referral sources to attract high-acuity patients to our facilities and recent regulatory changes limited the type of patient that can be admitted to certain higher-cost post-acute care facilities. Our average daily number of patients increased by 356, or 6.9%, to 5,498 in 2004 from 5,142 in 2003 due to our acquisition of five facilities in the last four months of 2003 and increased census at our existing facilities.

Revenue in our ancillary services segment increased $8.8 million, or 49.7%, to $26.5 million in 2004 compared to $17.7 million in 2003. The entire increase in ancillary services revenue resulted from an increase in our rehabilitation therapy services revenue, of which $4.3 million resulted from an increase in the number of rehabilitation therapy contracts with third-party facilities and $4.5 million resulted from increased services under existing third-party contracts. Increased services under existing third-party contracts primarily resulted from increases in volume at the facilities and, to a lesser extent, the timing of contract execution during the periods, with most contracts entered into during 2003 being in effect for all of 2004.

Operating Expenses.  Our operating expenses increased $35.1 million, or 14.3%, to $281.4 million, or 75.8% of revenue, in 2004 from $246.3 million, or 77.7% of revenue, in 2003.

Operating expenses for our long-term care services segment increased $29.7 million, or 12.5%, to $267.5 million, or 77.7% of revenue, in 2004 from $237.8 million, or 79.4% of revenue, in 2003.

The increase in long-term care services segment operating expense resulted from a $29.6 million, or 12.8%, increase in operating expenses at our skilled nursing facilities and a $0.1 million, or 2.0%, increase in operating expenses at our assisted living facilities.

Of the increase in operating expenses of our skilled nursing facilities, $16.7 million resulted from increased occupancy and $12.9 million resulted from operating cost per patient day increasing $6 or 4.8%, to $130 per day in 2004 from $124 per day in 2003. The $16.7 million increase in operating costs was due to our acquisition of five facilities in the last four months of 2003 and increased census at our existing facilities. The average daily number of patients increased by 356 to 5,498 in 2004 from 5,142 in 2003. The increase in operating costs per patient day primarily resulted from a $3.7 million increase in labor costs, due to a 3.4% increase in average hourly rates and the increased mix of high-acuity patients, an increase of $3.2 million in ancillary expenses, such as pharmacy and therapy costs, due to the increased mix of high-acuity patients, and a $6.0 million increase in other expenses, such as supplies, food, taxes and licenses, insurance and utilities, due to increased purchasing costs.

Operating expenses in our ancillary services segment, prior to any intercompany eliminations, increased $11.3 million, or 34.2%, to $44.3 million, or 78.0% of revenue in 2004 from $33.0 million, or 78.1% of revenue, in 2003. The increase in our ancillary services segment operating expenses resulted from a $10.8 million, or 32.7%, increase in operating expenses related to our rehabilitation therapy services to $43.8 million, or 77.2% of revenue, in 2004 from $33.0 million, or 78.1% of revenue, in 2003, and $0.5 million in start-up costs related to preparing for the initiation of our hospice business in early 2005. The increased operating expenses related to our rehabilitation therapy services business resulted from the increased activity under rehabilitation therapy contracts discussed above.

General and Administrative Services Expenses.  Our general and administrative expenses increased $5.9 million, or 31.6%, to $24.7 million, or 6.7% of total revenue, in 2004 from $18.8 million, or 5.9% of revenue, in 2003. This increase in general and administrative expenses resulted primarily from $1.3 million to support growth in our ancillary businesses including start-up costs to support the initiation of our new hospice business in early 2005, increased compensation and benefits of $2.6 million as part of building our new management team post emerging from bankruptcy, increased professional fees of $1.1 million related to our post-bankruptcy growth initiatives and the re-instatement of our public reporting with the Securities

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and Exchange Commission, and $0.9 million primarily due to increases in other expenses including employee recruitment, insurance, travel and licenses.

Depreciation and Amortization.  Depreciation and amortization increased by $0.5 million, or 6.5%, to $8.6 million in 2004 from $8.1 million in 2003 due to the a full year of new depreciation related to our acquisition of five facilities acquired in the latter part of 2003.

Rent.  Rent increased by $0.7 million, or 9.4%, to $8.3 million in 2004 from $7.6 million in 2003 as a result of rent increases at three facilities upon the renewal of expiring lease contracts and our acquisition of additional office space to support the growth of our ancillary business.

Interest Expense, Net of Interest Income and Other.  Interest expense, net of interest income and other, decreased by $5.7 million, or 21.1%, to $21.6 million in 2004 from $27.3 million in 2003. This decrease primarily resulted from lower interest rates associated with the refinancing of our outstanding indebtedness in July 2004.

Reversal of Charge Related to Decertification of a Facility.  Reversal of a charge related to decertification of a facility was $2.7 million in 2003. The charge had been recorded in 2000 in connection with the decertification of one of our facilities from the Medicare and Medicaid programs. We appealed the decertification decision in November 2002 and reached a settlement for recertification, resulting in the recovery of uncompensated care expenses in the amount of $2.7 million. There was no corresponding amount in 2004.

Write-off of Deferred Financing Cost.  Write-off of deferred financing costs increased by $3.8 million to $7.9 million in 2004 from $4.1 million in 2003. The write–off of capitalized deferred financing costs in 2003 related to our $132.0 million financing in connection with the re-structuring of debt as part of our emergence from bankruptcy. The write-off of deferred financing costs in 2004 related to refinancing our bankruptcy exit financing with a new $160.0 million first lien term loan and $100.0 million second lien term loan at lower interest rates.

Reorganization Expenses.  Reorganization expenses decreased by $11.6 million to $1.4 million in 2004 from $13.0 million in 2003. This decrease reflected the substantial completion of activities related to our emergence from bankruptcy in 2003.

Provision for Income Taxes.  Provision for income taxes increased by $6.0 million to $4.4 million in 2004 from an income tax benefit of $1.6 million in 2003. The provision for income taxes from continuing operations was $4.4 million for the year ended December 31, 2004, due primarily to the reversal of a portion of the valuation allowance attributable to the utilization of our net operating loss carryforwards in 2004 of $6.2 million, offset by charges for prior year reorganization expenses, dividends on our previously outstanding series A preferred shares and the provision for taxes on continuing operations which combined to total approximately $10.6 million. The income tax benefit for 2003 resulted from the recovery of California income tax paid in a prior year. Other than the recovery of the California income tax we were not able to recognize any income tax benefit as a result of our losses in 2003 because we did not have accumulated net income to recover the losses against.

Discontinued Operations.  Discontinued operations, net of taxes increased by $0.8 million to $2.8 million in 2004, compared to $2.0 million in 2003. In March 2005, we sold our California-based institutional pharmacy business and, therefore, the results of operations of our California-based pharmacy business have been classified as discontinued operations and are not included in the results of operations in 2004 or 2003.

Cumulative Effect of a Change in Accounting Principles.  The cumulative effect of a change in accounting principle was $12.3 million in 2003 with no corresponding amount in 2004. The cumulative effect of a change in accounting principle resulted from our adoption of SFAS No. 150 “Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity,” which requires that financial instruments issued in the form of shares that are mandatorily redeemable be classified as liabilities. The adoption impacted our accounting for our then outstanding series A preferred stock.

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Net Income.  Net income increased by $30.4 million to $16.5 million in 2004 from a net loss of $13.9 million in 2003.

Quarterly Data

The following is a summary of our unaudited quarterly results from operations for the year ended December 31, 2005 and the six months ended June 30, 2006.

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,			March 31,			June 30,
	2005			2005			2005			2005			2006			2006
	(In thousands)
Consolidated Statement of Operations Data
Revenue	$	108,936		$	111,493		$	122,206		$	120,212		$	125,186		$	131,171
Expenses:
Operating		83,039			83,491			91,307			89,391			92,311			98,430
General and administrative		7,410			7,374			6,856			21,683			9,451			9,183
Depreciation and amortization		2,159			2,807			2,461			2,564			3,674			3,573
Rent		2,518			2,518			2,606			2,634			2,566			2,417
		95,126			96,190			103,230			116,272			108,002			113,603
Income (loss) before other income (expenses), (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		13,810			15,303			18,976			3,940			17,184			17,568
Other income (expenses):
Interest expense		(5,363	)		(5,760	)		(7,914	)		(8,592	)		(11,227	)		(11,612	)
Interest income and other		151			211			176			411			386			242
Change in fair value of interest rate hedge		65			(217	)		16			(29	)		(21	)		77
Equity in earnings of joint venture		397			516			449			425			381			511
Write-off of deferred financing costs		—			(11,021	)		—			(5,605	)		—			—
Forgiveness of stockholder loan		—			—			—			(2,540	)		—			—
Reorganization expenses		(178	)		(279	)		(97	)		(453	)		—			—
Gain on sale of assets		—			—			—			980			—			—
Total other income (expenses), net		(4,928	)		(16,550	)		(7,370	)		(15,403	)		(10,481	)		(10,782	)

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	Three Months Ended
	March 31,			June 30,			September 30,			December 31,			March 31,		June 30,
	2005			2005			2005			2005			2006		2006
	(In thousands)
Income (loss) before (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		8,882			(1,247	)		11,606			(11,463	)		6,703		6,786
(Benefit from) provision for income taxes		(7,375	)		(2,904	)		3,875			(6,644	)		2,601		3,071
Income (loss) before discontinued operations and cumulative effect of a change in accounting principle		16,257			1,657			7,731			(4,819	)		4,102		3,715
Discontinued operations, net of tax		12,569			2,269			(50	)		(48	)		—		—
Cumulative effect of a change in accounting principle, net of tax		—			—			—			(1,628	)		—		—
Net income (loss)	$	28,826		$	3,926		$	7,681		$	(6,495	)	$	4,102	$	3,715

Liquidity and Capital Resources

The following table presents selected data from our consolidated statement of cash flows:

										Six Months Ended
	Year Ended December 31,									June 30,
	2003			2004			2005			2005			2006
	(In thousands)
Net cash (used in) provided by operating activities	$	(15,221	)	$	48,358		$	14,595		$	11,651		$	20,190
Net cash (used in) provided by investing activities		(26,093	)		(45,230	)		(223,242	)		26,424			(46,231	)
Net cash provided by (used in) financing activities		23,486			(1,132	)		241,253			(34,802	)		(1,495	)
Net (decrease) increase in cash and equivalents		(17,828	)		1,996			32,606			3,273			(27,536	)
Cash and equivalents at beginning of period		20,498			2,670			4,666			4,666			37,272
Cash and equivalents at end of period	$	2,670		$	4,666		$	37,272		$	7,939		$	9,736

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Six Months Ended June 30, 2006 and 2005

Net cash provided by operations for the six months ended June 30, 2006, was $20.2 million compared to $11.7 million for the six months ended June 30, 2005, an increase of $8.5 million. This increase of $8.5 million was due to the following items (in millions):

$	7.9		due to an increase in the income from continuing operations before depreciation and amortization, other income (expenses) and income taxes from $34.1 million for the six month period ending June 30, 2005 to $42.0 million for the six month period ending June 30, 2006.
	0.5		due to reorganization costs incurred in the first six months of 2005.
	(1.2	)	due to the revenue less expenses of our discontinued pharmacy operations for the six month period ending June 30, 2005.
	1.6		due to an increase in the cash provided by the change in operating assets and liabilities from a $0.2 million use of cash for the six month period ending June 30, 2005 to $1.4 million cash provided for the six month period ending June 30, 2006.
	(0.3	)	due to other items.
$	8.5		Total increase.

Investing activities used $46.0 million in the six months ended June 30, 2006 and investing activities provided $26.4 million of cash in the six months ended June 30, 2005. The primary use of funds in the six months ended June 30, 2006 was $34.0 million to purchase three facilities in Missouri and the leasehold of one facility in Las Vegas, Nevada, as well as $8.0 million in capital expenditures (including capital expenditures for the development of our Express Recovery^tm units). Net cash provided by investing activities in the six months ended June 30, 2005 was primarily associated with the cash proceeds of $36.6 million from the sale of our California pharmacy business, partially offset by capital expenditures for property and equipment of $6.2 million and capital expense for the development of our Express Recovery^tm units.

Net cash used in financing activities in the six months ended June 30, 2006 totaled $1.4 million compared to $34.8 million in the six months ended June 30, 2005. The cash used in the six months ended June 30, 2006 consisted of required principal payments to reduce debt of $1.5 million, partially offset by $0.1 million provided by the issuance of stock. Cash used in financing activities in the six months ended June 30, 2005 reflects the $15.7 million to fully redeem our Series A preferred stock, $108.6 million to pay a special dividend to our stockholders, and $11.7 million incurred in deferred financing costs and early termination fees with our debt, partially offset by the net increase of $101.2 million in our debt.

Years Ended December 31, 2005 and 2004

Net cash provided by operations in 2005 was $14.6 million compared to $48.4 million in 2004, a decrease of $33.8 million. This decrease of $33.8 million was due to the following items (in millions):

$	16.4		due to an increase in the income from continuing operations before depreciation and amortization, provision for doubtful accounts and non-cash stock-based compensation, other income (expenses) and income taxes to $75.8 million in 2005 compared to $59.4 million in 2004.
	(23.8	)	due to an increase in taxes paid to $25.2 million in 2005 compared to $1.4 million in 2004.
	(29.3	)	due to a decrease in the cash provided by a change in operating assets and liabilities to a $18.2 million use of cash in 2005 compared to $11.1 million provision of cash in 2004.
	2.9		due to other items.
$	(33.8	)	Total decrease.

Net cash used in investing activities in 2005 was $223.2 million and in 2004 net cash used in investing activities was $45.2 million. The primary use of funds in 2005 was $253.4 million to purchase the then outstanding equity interests of our former stockholders as well as $11.2 million in capital expenditures (including $2.5 million of capital expenditures for the development of twelve Express Recovery^tm units)

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somewhat offset by the gross proceeds of $41.1 million associated with the sale of our two California-based institutional pharmacies as well as two other long-term care facilities. Net cash used in investing activities in 2004 was $45.2 million primarily associated with routine capital expenditures for property and equipment of $8.2 million. Outside of routine capital expenditures, in 2004 we incurred $1.1 million of capital expense for the development of nine Express Recovery^tm units. The primary use of funds in 2004 was associated with our purchase of the Vintage Park group of assets for $42.7 million in total consideration.

Net cash provided by financing activities in 2005 totaled $241.3 million, consisting of $533.3 million in sources of cash and $292.0 million in uses of cash.

Sources of cash consisted of the following:

•  $211.3 million of equity investment associated with the Transactions;

•  $123.1 million received from the refinancing in July 2005;

•  $198.7 million received from the issuance of our senior subordinated notes in December, 2005;

•  $0.1 million received from the exercise of stock options; and

•  $0.1 million received from proceeds from sale of interest rate hedge.

Uses of cash consisted of the following:

•  $110.0 million to fully pay-off our second lien term loan;

•  $108.6 million to pay a special dividend to our stockholders;

•  $28.3 million incurred in deferred financing costs and early termination fees associated with our new debt issuances;

•  $15.7 million to fully redeem our series A preferred stock in accordance with our new senior debt structure;

•  $15.0 million to reduce the outstanding balance under our revolver; and

•  $14.4 million to reduce our term debt.

Net cash used in financing activities in 2004 totaled $1.1 million, consisting of the following uses of cash, offset by the proceeds from the issuance of long-term debt of approximately $279.0 million and $1.4 million in proceeds from sale of interest rate hedge:

•  $228.9 million for repayments of our long-term debt due to the refinancing of our debt capital structure;

•  $23.3 million to reduce our term debt;

•  $15.0 million dividend payment made to our series A preferred stockholders; and

•  $14.3 million incurred in deferred financing costs and fees paid for the early extinguishment of debt associated with our new debt issuance.

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Years Ended December 31, 2004 and 2003

Net cash provided by operations in 2004 was $48.4 million compared to net cash used of $15.2 million in 2003, an increase of $63.6 million. This increase of $63.6 million was due to the following items (in millions):

$	11.5		due to an increase in the income from continuing operations before depreciation and amortization, provision for doubtful accounts and non-cash stock-based compensation, other income (expenses) and income taxes to $59.4 million in 2004 compared to $47.9 million in 2003.
	42.9		due to an increase in the cash provided by the change in operating assets and liabilities to a $11.1 million provision of cash provided in 2004 compared to a $31.8 million use of cash in 2003.
	10.9		due to a decrease in reorganization costs to $1.8 million in 2004 compared to $12.7 million in 2003.
	(1.7	)	due to other items.
$	63.6		Total increase.

Net cash used in investing activities in 2004 was $45.2 million compared to $26.1 million in 2003. We made capital expenditures for property and equipment of $8.2 million in 2004 and $19.1 million in 2003 primarily for maintenance and other routine purposes. In addition to these routine capital expenditures, in 2004 we incurred $1.1 million of capital expense for the development of nine Express Recovery^tm units and in 2003 we incurred $13.5 million of capital expense in connection with the purchase of properties we had recorded earlier as capitalized leases. The primary use of funds in 2004 was associated with our purchase of the Vintage Park group of assets for $42.7 million in total consideration. Lastly, in 2003 our restricted cash increased by $4.5 million for the establishment of our self-insured workers compensation program.

Net cash used in financing activities in 2004 totaled $1.1 million, including:

•  $228.9 million for repayments of our long-term debt due to the refinancing of our debt capital structure;

•  $23.3 million to reduce our term debt;

•  $15.0 million dividend payment made to our series A preferred stockholders;

•  $14.3 million incurred in deferred financing costs and fees paid for the early extinguishment of debt associated with our new debt issuance and purchase of an interest rate hedge; and

•  offset by proceeds from the issuance of long-term debt of approximately $279.0 million and $1.4 million of proceeds for the sale of the interest rate hedge.

Net cash provided by financing activities in 2003 totaled $23.5 million, consisting of proceeds from the issuance of long-term debt of $132.1 million and borrowings under our then existing revolving credit facility, as well as a $1.1 million charge related to the new stock, offset by the cash used in financing activities. Cash used in financing activities during 2003 included:

•  an aggregate of $76.6 million to fund the payment in full of our pre-bankruptcy petition $30 million revolving credit facility and $90 million term loan facility;

•  a $50.0 million payment to holders of our senior subordinated notes pursuant to the terms of our Chapter 11 reorganization plan, $36 million of which was for accrued interest;

•  $22.5 million in repayments of long-term debt;

•  $11.6 million to exercise our option to purchase four skilled nursing facilities;

•  $4.3 million in financing costs incurred in connection with our emergence from bankruptcy and incurrence of associated debt; and

•  $2.9 million to purchase an interest rate cap in accordance with the terms of our $95 million senior mortgage term loan incurred upon our emergence from bankruptcy; we purchased the interest rate

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cap in August 2003 to limit our interest rate risk on our $95 million senior mortgage term loan to a maximum of LIBOR plus 4.5%; the cap was treated as a cash flow hedge for accounting purposes, which required us to adjust the carrying value of the hedge asset at each reporting period to the current value.

Cash flows from Discontinued Operations

Cash flows from discontinued operations are combined with cash flows from continuing operations within each cash flows statement category. In the years ended December 31, 2003, 2004 and 2005, cash flows from discontinued operations were approximately $3.3 million, $4.4 million and $0.4 million, respectively. Our future liquidity and capital resources are not expected to be materially affected by the absence of cash flows from discontinued operations.

Principal Debt Obligations and Capital Expenditures

Historically, our primary sources of liquidity were cash flow generated by our operations and borrowings under our credit facilities, mezzanine loans, term loans and senior subordinated notes. Following the Transactions, our primary sources of liquidity have been our cash on hand, our cash flow from operations and availability under the revolving portion of our first lien secured credit facility, which is subject to our satisfaction of certain financial covenants therein. Following the Transactions, our primary liquidity requirements are for debt service on our amended senior secured term loan and our 11% senior subordinated notes, capital expenditures and working capital.

We are significantly leveraged. As of June 30, 2006, we had outstanding $461.9 million in aggregate indebtedness, consisting of $198.8 million principal amount of 11% senior subordinated notes (net of the original issue discount of $1.2 million), a $257.4 million first lien senior secured term loan that matures on June 15, 2012, capital leases and other debt of approximately $5.7 million and $4.2 million in outstanding letters of credit against our $75.0 million revolver leaving approximately $70.8 million of additional borrowing capacity under our first lien secured credit facility. For 2004 and 2005, and for the six months ended June 30, 2006, our interest expense, net of interest income, was $21.6 million, $26.7 million and $22.2 million, respectively.

On December 27, 2005, concurrently with the consummation of the Transactions, we repaid in full our $110.0 million second lien senior secured term loan. We also amended and restated our amended senior secured credit facility, to provide for up to $334.4 million of financing, consisting of a $259.4 million term loan with a maturity of June 15, 2012 and a $75.0 million revolving credit facility with a maturity of June 15, 2010. The revolving credit facility also includes a subfacility for letters of credit and a swing line subfacility. The full amount of the loans under the revolving credit facility are due on the maturity date of the revolving credit facility. Amounts borrowed under the term loan are due in quarterly installments of $650,000 at the end of each calendar quarter with the remaining principal amount due on the maturity date for the term loan.

The loans under the amended senior secured credit facility bear interest on the outstanding unpaid principal amount at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (i) the prime rate announced by Credit Suisse and (ii) the federal funds rate plus one-half of 1.0% or (b) a reserve adjusted Eurodollar rate. The applicable margin for term loans is 1.75% for base rate loans and 2.75% for Eurodollar rate loans, and the applicable margin for revolving loans will range from 1.00% to 1.75% for base rate loans and 2.00% to 2.75% for Eurodollar loans, in each case based on our consolidated leverage ratio. Loans under the swing line subfacility will bear interest at the rate applicable to base rate loans under the revolving credit facility.

Immediately prior to the Transactions, we had outstanding:

•  our $259.4 million amended senior secured term loan and a $50.0 million amended senior secured revolving credit facility that matured on June 15, 2010;

•  a $110.0 million second lien senior secured term loan; and

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•  capital leases and other debt of approximately $5.9 million.

On June 15, 2005, we entered into an amendment to our existing first lien senior secured credit facility and our second lien senior secured credit facility to increase the term loan and revolving loan portions of those facilities to $259.4 million and $110.0 million, respectively.

On July 22, 2004, we entered into our first lien senior secured credit facility and our second lien senior secured credit facility. The first lien senior secured credit facility initially provided for a senior secured term loan of $140.0 million and a revolving credit facility of $35.0 million. We did not draw down any amounts under the revolving credit facility. The second lien senior secured credit facility initially provided for a senior secured term loan of $100.0 million and an additional term loan of $30.0 million. We used the proceeds from these loans to pay all of the principal and accrued interest on our then outstanding debt that we had incurred upon emerging from bankruptcy.

Upon emerging from bankruptcy on August 19, 2003, we entered into a $32.0 million revolving credit facility, which was fully drawn, a $23.0 million secured mezzanine term loan and a $95.0 million senior mortgage term loan. We used a portion of the proceeds of these loans to pay amounts then outstanding under our $90.0 million term loan facility and $30.0 million revolving credit facility and to pay $50.0 million in cash, consisting of approximately $36.0 million in outstanding interest and approximately $14.0 million of principal, to holders of our 111/4% senior subordinated notes due 2008. We also satisfied our remaining obligations to the holders of our 111/4% senior subordinated notes through the issuance by us to those holders on a pro rata basis of approximately $106.8 million of new senior subordinated secured increasing rate notes due 2008 that accrued interest at an initial rate of 9.25% and provided for annual rate increases and 58,642 shares of our common stock.

On March 1, 2006, we acquired three facilities that provide skilled nursing and residential care and are located in close proximity to one of our existing markets. We financed the $31.0 million purchase price with cash retained on our balance sheet following the completion of the Transactions.

We intend to invest in the maintenance and general upkeep of our facilities on an ongoing basis. We expect to spend on average per annum about $400 per licensed bed for each of our skilled nursing facilities and $400 per unit at each of our assisted living facilities. We also expect to perform renovations of our existing facilities every five to ten years to remain competitive. Combined, we expect that these activities will amount to between $8.0 million to $12.0 million in capital expenditures per annum on our existing facilities. We also expect to build additional Express Recovery^tm units at a cost per location of between $400,000 and $600,000. We are in the process of developing an additional nine Express Recovery^tm units that will be completed in the next 12 months. Finally, we may also invest in expansions of our existing facilities and the acquisition or development of new facilities.

Based upon our current level of operations, we believe that cash generated from operations, cash on hand and borrowings available to us will be adequate to meet our anticipated debt service requirements, capital expenditures and working capital needs for the next 12 months. We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available under our new senior secured credit facilities, or otherwise, to enable us to grow our business, service our indebtedness, including our first lien secured credit facilities and the senior subordinated notes, or make anticipated capital expenditures. One element of our business strategy is to selectively pursue acquisitions and strategic alliances. Any acquisitions or strategic alliances may result in the incurrence of, or assumption by us, of additional indebtedness. We continually assess our capital needs and may seek additional financing, including debt or equity as considered necessary to fund capital expenditures and potential acquisitions or for other corporate purposes. Our future operating performance, ability to service or refinance the senior subordinated notes and ability to service and extend or refinance the new senior secured credit facilities and the senior subordinated notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

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Other Factors Affecting Liquidity and Capital Resources

Medical and Professional Malpractice and Workers’ Compensation Insurance.  In recent years, physicians, hospitals and other healthcare providers have become subject to an increasing number of legal actions alleging malpractice, product liability or related legal theories. Many of these actions involve large claims and significant defense costs. To protect ourselves from the cost of these claims, we maintain professional liability and general liability as well as workers’ compensation insurance in amounts and with deductibles that we believe to be sufficient for our operations. Historically, unfavorable pricing and availability trends emerged in the professional liability and workers’ compensation insurance market and the insurance market in general that caused the cost of these liability coverages to generally increase dramatically. Many insurance underwriters became more selective in the insurance limits and types of coverage they would provide as a result of rising settlement costs and the significant failures of some nationally known insurance underwriters. As a result, we experienced substantial changes in our professional insurance program beginning in 2001. Specifically, we were required to assume substantial self-insured retentions for our professional liability claims. A self-insured retention is a minimum amount of damages and expenses (including legal fees) that we must pay for each claim. We use actuarial methods to estimate the value of the losses that may occur within this self-insured retention level and we are required under our workers compensation insurance agreements to post a letter of credit or set aside cash in trust funds to securitize the estimated losses that we will assume. Because of the high retention levels, we cannot predict with absolute certainty the actual amount of the losses we will assume and pay.

We estimate our professional liability and general liability reserve on a quarterly basis based upon an independent actuary report as well as our workers’ compensation reserve based upon a semi-annual study by an independent actuary using the most recent trends of claims, settlements and other relevant data from our own and our industry’s loss history. Based upon the information provided by our independent actuaries, at June 30, 2006, we had reserved $37.9 million for known or unknown or potential uninsured professional liability and general liability and $10.2 million for workers’ compensation claims. We have estimated approximately $18.2 million of the total to be payable in 2006, however there are no set payment schedules and we cannot assure you that the payment amount in 2006 will not be significantly larger. To the extent that subsequent claims information varies from loss estimates, the liabilities will be adjusted to reflect current loss data. There can be no assurance that in the future malpractice or workers’ compensation insurance will be available at a reasonable price or that we will not have to further increase our levels of self-insurance.

Inflation.  We derive a substantial portion of our revenue from the Medicare program. We also derive revenue from state Medicaid and similar reimbursement programs. Payments under these programs generally provide for reimbursement levels that are adjusted for inflation annually based upon the state’s fiscal year for the Medicaid programs and in each October for the Medicare program. However, we cannot assure you that these adjustments will continue in the future, if received, will reflect the actual increase in our costs for providing healthcare services.

Labor and supply expenses make up a substantial portion of our operating expenses. Those expenses can be subject to increase in periods of rising inflation and when labor shortages occur in the marketplace. To date, we have generally been able to implement cost control measures or obtain increases in reimbursement sufficient to offset increases in these expenses. We cannot assure you that we will be successful in offsetting future cost increases.

Seasonality.  Our business experiences slight seasonality as a result of variation in average daily census levels, with historically the highest average daily census in the first quarter of the year and the lowest average daily census in the third quarter of the year. In addition, revenue has typically increased in the fourth quarter of a year on a sequential basis due to annual increases in Medicare and Medicaid rates that typically have been implemented during that quarter.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

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Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2005 (in thousands):

			Less Than						More Than
	Total		1 Yr.		1-3 Yrs.		3-5 Yrs.		5 Yrs.
Senior subordinated notes	$	377,161	$	12,161	$	44,000	$	44,000	$	277,000
Amended senior secured credit facility		380,852		21,295		43,281		43,484		272,792
Capital lease obligations		4,553		355		722		2,611		865
Other long-term debt obligations		3,037		341		681		681		1,334
Operating lease obligations(1)		78,572		9,359		18,065		17,046		34,102
	$	844,175	$	43,511	$	106,749	$	107,822	$	586,093

(1) We lease some of our facilities under non-cancelable operating leases. The leases generally provide for our payment of property taxes, insurance and repairs, and have rent escalation clauses, principally based upon the Consumer Price Index or other fixed annual adjustments. The amounts shown reflect the future minimum rental payments under these leases.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, our operations are exposed to risks associated with fluctuations in interest rates. We routinely monitor our risks associated with fluctuations in interest rates and consider the use of derivative financial instruments to hedge these exposures. We do not enter into derivative financial instruments for trading or speculative purposes nor do we enter into energy or commodity contracts.

Interest Rate Risk

We are exposed to interest rate changes primarily as a result of our credit facility and long-term debt used to maintain liquidity and fund capital expenditures and operations. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to provide more predictability to our overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates, although we use our line of credit for short-term borrowing purposes. In accordance with the requirements under our first lien secured credit facility, we have entered into a three year interest rate cap agreement expiring in August 2008 for principle in the amount of $148.0 million. This provides us the right at any time during the contract period to exchange the 90 day LIBOR then in effect for a 6.0% capped rate. Additionally, we do not believe that the interest rate risk represented by our floating rate debt is material as of June 30, 2006 in relation to total assets of $832.9 million.

At December 31, 2005, we had $258.7 million of debt subject to variable rates of interest. A change of 1.0% in short-term interest rates would result in a change to our interest expense of $2.6 million annually. At December 31, 2005, we had $37.3 million of cash and equivalents that are affected by market rates of interest. A change of 1.0% in the rate of interest would result in a change to our interest income of $0.4 million annually.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts, weighted average interest rates, fair values and other terms required by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes (dollars in thousands).

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																					Fair
	2006			2007			2008			2009			2010			Thereafter			Total		Value
Fixed-rate debt(1)	$	318		$	343		$	371		$	2,565		$	412		$	201,931		$	205,940	$	205,940
Average interest rate		11.0	%		11.0	%		11.0	%		11.0	%		11.0	%		11.0	%
Variable-rate debt	$	2,600		$	2,600		$	2,600		$	2,600		$	2,600		$	245,700		$	258,700	$	258,700
Average interest rate(2)		7.3	%		7.5	%		7.6	%		7.7	%		7.8	%		7.8	%

(1)	Excludes unamortized original issue discount of $1.3 million on our $200 million senior subordinated notes.
(2)	Based on a forward LIBOR rate estimate.

The table incorporates only those exposures that exist as of December 31, 2005, and does not consider those exposures or positions which could arise after that date. Moreover, because firm commitments are not presented in the table above, the information presented therein has limited predictive value. As a result, our interest rate fluctuations will depend on the exposures that arise during the period and interest rates.

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BUSINESS AND INDUSTRY

Overview

We are a leading provider of integrated long-term healthcare services through our skilled nursing facilities and rehabilitation therapy business. We also provide other related healthcare services, including assisted living care and hospice care. We focus on providing high-quality care to our patients, and we have a strong reputation for treating patients who require a high level of skilled nursing care and extensive rehabilitation therapy, whom we refer to as high-acuity patients. As of June 30, 2006, we owned or leased 60 skilled nursing facilities and 12 assisted living facilities, together comprising approximately 8,300 licensed beds. Our facilities, approximately 72% of which we own, are located in California, Texas, Kansas, Missouri and Nevada and are generally clustered in large urban or suburban markets. For the year ended December 31, 2005 and the six months ended June 30, 2006, our skilled nursing facilities, including our integrated rehabilitation therapy services at these facilities, generated approximately 86.8% and 85.9%, respectively, of our revenue with the remainder generated by our other related healthcare services.

In 2005 and the first six months of 2006, our revenue was $462.8 million and $256.4 million, respectively. To increase our revenue we focus on improving our skilled mix, which is the percentage of our patient population that is eligible to receive Medicare and managed care reimbursements. Medicare and managed care payors typically provide higher reimbursement than other payors because patients in these programs typically require a greater level of care and service. We have increased our skilled mix from 19.1% for 2003 to 24.0% for the first six months of 2006. Our high skilled mix also results in a high quality mix, which is our percentage of non-Medicaid revenues. We have increased our quality mix from 58.8% for 2003 to 68.4% for the first six months of 2006. In 2005, our net income before the cumulative effect of a change in accounting principle was $35.6 million, our EBITDA was $44.4 million and our Adjusted EBITDA was $78.6 million. In the first six months of 2006, our net income was $7.8 million and our EBITDA and Adjusted EBITDA were each $42.9 million. We define EBITDA and Adjusted EBITDA and provide a reconciliation of EBITDA and Adjusted EBITDA to net income from continuing operations before the cumulative effect of a change in accounting principle (the most directly comparable financial measure presented in accordance with generally accepted accounting principals) in footnote 2 to “Selected Consolidated Financial Data.” See “Non-GAAP Financial Measures” for a description of our uses of, and the limitations associated with the use of, EBITDA and Adjusted EBITDA.

Industry and Market Opportunity

We operate in the over $120 billion United States nursing home market through the operation of our skilled nursing and assisted living facilities. The nursing home market is highly fragmented, and according to the American Health Care Association, comprises approximately 16,000 facilities with approximately 1.7 million licensed beds as of June 2006. As of December 31, 2005, the five largest long-term healthcare companies combined controlled approximately 10% of these facilities. We believe the key underlying trends within the industry are favorable, as described below.

•  Demand driven by aging population and increased life expectancies.  We believe that demand for long-term healthcare services will continue to grow due to an aging population and increased life expectancies. According to the U.S. Census Bureau, the number of Americans aged 65 or older is expected to increase from approximately 37 million in 2005 to approximately 40 million in 2010 and to approximately 47 million in 2015, representing average annual growth from 2005 of 1.9% and 2.5%, respectively. The number of Americans aged 85 and over is forecasted to more than double from 4.2 million in 2000 to 9.6 million by 2030.

•  Shift of patient care to lower cost alternatives.  We expect that the growth of the elderly population in the United States will continue to cause healthcare costs to increase at a faster rate than the available funding from government-sponsored healthcare programs. In response, the federal government has adopted cost containment measures that encourage the treatment of patients in more cost effective settings such as skilled nursing facilities, for which the staffing requirements and associated

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costs are often significantly lower than at short or long-term acute-care hospitals, in-patient rehabilitation facilities or other post-acute care settings. Recent regulatory changes have created incentives for these facilities to minimize patient lengths of stay and placed limits on the type of patient that can be admitted to these facilities, thereby increasing the demand for skilled nursing care. At the same time, the government has increased Medicare funding to skilled nursing facilities for the treatment of high-acuity patients to a level at which we believe these providers can deliver effective clinical outcomes. As a result, we believe that many high-acuity patients that would have been previously treated in these facilities are increasingly being cared for in skilled nursing facilities.

•  Supply/Demand imbalance.  According to the AARP Public Policy Institute, the 65 or older population in California and Texas is expected to grow from 2002 to 2020 by 79.5% and 74.6%, respectively, compared to the national average growth of 58.4% over this same period. We expect that this growth in the elderly population will result in increased demand for services provided by long-term healthcare facilities in the United States, including skilled nursing facilities, assisted living facilities and in-patient rehabilitation facilities. Despite this projected growth in demand for long-term healthcare services, there has been a decline in the number of nursing facility beds. According to the American Health Care Association, the total number of nursing facility beds in the United States has declined from approximately 1.8 million in December 2001 to approximately 1.7 million in June 2006, we believe in part due to the migration of lower-acuity patients to alternative sources of long-term care. This supply/demand imbalance is also highlighted in our key states, with the number of nursing facility beds in California declining from 2001 to 2006 by 5.9% and remaining relatively flat in Texas over such period.

•  Medicare reimbursement.  Medicare is a federal program and provides certain healthcare benefits to beneficiaries who are 65 years of age or older, blind, disabled or qualify for the End Stage Renal Disease Program. Since 1999, Medicare has reimbursed our skilled nursing facilities at a predetermined rate, based on the anticipated costs of treating patients. Under this system, reimbursement rates are determined by classifying each patient into a resource utilization group, or RUG, category that is based upon each patient’s acuity level. Between 1999 and 2003, Congress enacted a series of temporary supplemental payments and adjustments to respond to financial pressures placed on the nursing home industry. Effective January 1, 2006, the last of the previously established temporary payments applicable to our patient population expired. At that time, the Center for Medicare and Medicaid Services increased the number of RUG categories from 44 to 53 and refined the reimbursement rates for the existing RUG categories in order to better align the respective payments with patient acuity levels. These nine new RUG categories generally apply to higher acuity patients, and the higher reimbursement rates for those RUGs have been adopted to better account for the higher costs of those patients. As part of a market basket adjustment implemented for increased cost of living, Medicare payments to skilled nursing facilities increased by an average of 3.1% for 2006 and will also increase by an average of 3.1% for 2007.

On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005, or DRA, which will reduce net Medicare and Medicaid spending by approximately $11 billion over five years. Under the previously enacted federal law, caps on annual reimbursement for rehabilitation therapy became effective on January 1, 2006. The DRA provides for exceptions to those caps. The caps apply to patients with certain conditions or multiple complexities whose therapy is reimbursed under Medicare Part B and provided in 2006. The majority of the residents in our skilled nursing facilities and patients served by our rehabilitation therapy programs whose therapy is reimbursed under Medicare Part B have qualified for these exceptions to these reimbursement caps. Unless extended, these exceptions will expire on December 31, 2006. In addition, on February 6, 2006, the Bush Administration released its fiscal year 2007 budget proposal, which would reduce Medicare spending by $2.5 billion in fiscal year 2007 and $35.9 billion over five years. The budget would freeze payments in fiscal year 2007 to skilled nursing facilities and reduce payment updates for hospice services. To date, congressional resolutions have not included these reimbursement cuts, and these

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proposals would require legislation to be implemented. For a more detailed description of these proposed provisions, see “Business — Sources of Reimbursement.”

•  Medicaid reimbursement.  Medicaid is a state-administered medical assistance program for the indigent, operated by individual states with the financial participation of the federal government. All states in which we operate reimburse long-term care services for individuals who are Medicaid eligible and qualify for institutional care. Medicaid reimbursement rates are generally lower than reimbursement provided by Medicare. Rapidly increasing Medicaid spending, combined with slower state revenue growth, has led many states to institute measures aimed at controlling spending growth. Given that Medicaid outlays are a significant component of state budgets, we expect continuing cost containment pressures on Medicaid outlays for skilled nursing facilities in the states in which we operate. In addition, the DRA limited the circumstances under which an individual may become financially eligible for nursing home services under Medicaid. While Medicaid spending varies by state, we believe the states in which we operate generally provide a favorable operating environment.

The U.S. Department of Health and Human Services has established a Medicaid advisory commission charged with recommending ways in which Congress can restructure the program and reduce Medicaid spending growth by up to $10 billion over five years. The commission is expected to issue its report by December 31, 2006.

•  Tort reform.  In response to the growing cost of medical malpractice claims, many states, including California and Texas, have implemented tort reform measures capping non-economic damages in many cases and limiting certain punitive damages. These caps both limit exposure to claims and serve to expedite resolution of claims.

Our Competitive Strengths

We believe the following strengths serve as a foundation for our strategy:

•  High-quality patient care and integrated service offerings.  Through our dedicated and well-trained employees, attractive facility environment and broad service offering, we believe that we provide high-quality, cost-effective care to our patients. We believe that our integrated skilled nursing care and rehabilitation therapy service offerings are particularly attractive to high-acuity patients. These patients require more intensive and medically complex care, and which typically results in higher reimbursement rates. We enhanced our position as a select provider to high-acuity patients by introducing our Express Recovery^tmprogram, which uses a dedicated unit within a skilled nursing facility to deliver a comprehensive rehabilitation regime to high-acuity patients. We have increased our skilled mix from 19.1% for 2003 to 24.0% for the first six months of 2006.

•  Strong reputation in local markets.  We believe we have a strong reputation for high-quality care and successful clinical outcomes in our local markets. We believe this reputation has enabled us to build strong relationships with managed care payors, as well as referral sources such as hospitals and specialty physicians that frequently refer high-acuity patients to us.

•  Concentrated network in attractive markets.  Approximately 67% of our skilled nursing facilities are located in urban or suburban markets. These markets are typically more heavily penetrated by specialty physicians, large medical centers and managed care payors, which are all key sources of referrals for high-acuity patients. Many of our facilities are located in close proximity to large medical centers and specialty physician groups, allowing us to develop relationships with these key referral sources and increase the number of high-acuity patients referred to us. We believe that managed care payors typically prefer a regional network of facilities such as ours because they prefer to contract with a limited number of providers. In addition, our clustered facility locations have enabled us to achieve lower operating costs through flexible sharing of therapists and nurses among facilities, reduced third-party contract labor and the placement of experienced managers in close proximity to our facilities.

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•  Successful integration of acquisitions.  Since August 2003 we have acquired or entered into long-term leases for 26 skilled nursing and assisted living facilities across four states. Immediately following the closing of an acquisition, we transition the acquired facilities to the same management platform we use to support our existing facilities, which includes centralized business services as well as common information systems, processes and standard operating procedures, including risk management. We have successfully integrated these facilities and have experienced average facility level margin improvement of 2.6% and an increase in skilled mix of 2.4% for the 22 of these facilities acquired before 2006 as measured by the first three full months immediately following each acquisition relative to the comparative period one year later.

•  Significant facility ownership.  As of June 30, 2006, we owned approximately 72% of our facilities. Ownership provides us with greater operating and financial flexibility than leasing because it provides longer term control over facility operations, mitigates our exposure to increasing rent expense and allows us to respond more quickly and efficiently to changes in market demand through facility renovations and modifications.

•  Strong and experienced management team.  Our senior management team has an average of more than 23 years of healthcare industry experience and has made significant financial and operating improvements since joining us in 2002. By establishing our focus on key performance metrics and creating a culture of accountability across all of our facilities, our senior management team has developed a framework for monitoring and improving quality of care and profitability. Our senior management team has been the motivating force in the development of innovative programs to attract high-acuity patients, such as our Express Recovery^tmprogram.

Our Strategy

The primary elements of our business strategy are to:

•  Focus on high-acuity patients.  We focus on attracting high-acuity patients, for whom we are reimbursed at higher rates. We believe that we can continue to leverage our integrated service offering and our reputation for providing high-quality care to expand our referral network and increase the number of high-acuity patients referred to us. In addition, we intend to introduce our Express Recovery^tmprogram in more of our facilities and to develop other innovative programs to better serve high-acuity patients. To date, we have added 18 Express Recovery^tm units at our facilities.

•  Expand our rehabilitation and other related healthcare businesses.  We intend to continue to grow our rehabilitation therapy and hospice care businesses by expanding their use in both our own and in third-party facilities and by adding new third-party contracts. We have increased our third-party rehabilitation revenue 51%, from $18.9 million in the first six months of 2005 to $29.5 million in the first six months of 2006. We believe that by continuing to grow these businesses and adding to our portfolio of related healthcare services, we will be able to capture a greater share of healthcare expenditures in our key markets.

•  Drive revenue growth organically and through acquisitions and development.  We pursue organic revenue growth by expanding our referral network, increasing our service offerings to high-acuity patients and expanding our other related healthcare services offerings. We regularly evaluate strategic acquisitions and new development opportunities in attractive markets, particularly in the western region of the United States, that allow us to build relationships with additional referral sources, such as hospitals, specialty physicians and managed care organizations, or achieve operational efficiencies. For example, we currently are advancing plans to develop three skilled nursing facilities on or near the Baylor campus.

•  Monitor performance measures to increase operating efficiency.  We focus on reducing operating costs by maximizing the efficient use of our labor resources and managing our insurance and professional and general liability and workers’ compensation expenses. We have had success with

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these initiatives in part by implementing systems to monitor closely key metrics that measure our performance in such areas as quality of care, occupancy, payor mix, labor utilization and turnover and insurance claims. We believe that by continuing to monitor our performance closely we will be able to reduce our use of outsourced services and our overtime compensation and proactively address potential sources of medical malpractice and workers’ compensation exposure, all of which would enable us to improve our operating results.

•  Attract and retain talented and qualified employees.  We seek to hire and retain talented and qualified employees, including our administrative and management personnel. We also seek to leverage our employees’ capabilities through our culture, quality of care training and incentive programs in order to enhance our ability to provide quality clinical and rehabilitation services.

Recent Transactions

On June 16, 2006, we purchased a long-term leasehold interest in a skilled nursing facility in Las Vegas, Nevada for $2.7 million in cash and on March 1, 2006, we purchased two skilled nursing facilities and one skilled nursing and residential care facility in Missouri for $31.0 million in cash. These facilities added approximately 536 beds to our operations.

In December 2005, Onex Partners LP and Onex Corporation, together Onex, certain members of our management and Baylor Healthcare System, together the rollover investors, and other associates of Onex purchased our business in a merger for $645.7 million. Onex and the rollover investors funded the purchase price, related transaction costs and an increase of cash on our balance sheet with equity contributions of approximately $222.9 million, the issuance and sale of $200.0 million principal amount of our 11% senior subordinated notes and the incurrence and assumption of $259.4 million in term loan debt. As a result of the merger, we became a wholly-owned subsidiary of SHG Holding Solutions, Inc., or SHG Holding, and Onex, its affiliates and associates, and the rollover investors held approximately 95% and 5%, respectively, of the outstanding capital stock of SHG Holding, not including restricted stock issued to management at the time of the Transactions.

We refer to the merger, the equity contributions, the financings and use of proceeds therefrom and related transactions, collectively, as the “Transactions.” We describe the Transactions in greater detail under “The Transactions.”

Operations

Our services focus primarily on the medical and physical issues facing elderly high-acuity patients and are provided through our skilled nursing facilities, assisted living facilities, integrated and third party rehabilitation therapy business and hospice.

We have two reportable operating segments — long-term care services, which includes the operation of skilled nursing and assisted living facilities and is the most significant portion of our business, and ancillary services — which includes our integrated and third party rehabilitation therapy and hospice businesses.

Long-Term Care Services Segment

Skilled Nursing Facilities

As of June 30, 2006, we provided skilled nursing care at 60 regionally clustered facilities, having 7,426 licensed beds, in California, Texas, Kansas, Missouri and Nevada. We have developed programs for and actively market our services to high-acuity patients, who are typically admitted to our facilities as they recover from strokes, other neurological conditions, cardiovascular and respiratory ailments, single joint replacements and other muscular or skeletal disorders.

We use interdisciplinary teams of experienced medical professionals, including therapists, to provide services prescribed by physicians. These teams include registered nurses, licensed practical nurses, certified nursing assistants and other professionals who provide individualized comprehensive nursing care 24 hours a

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day. Many of our skilled nursing facilities are equipped to provide specialty care, such as chemotherapy, dialysis, enteral/parenteral nutrition, tracheotomy care, and ventilator care. We also provide standard services to each of our skilled nursing patients, including room and board, special nutritional programs, social services, recreational activities and related healthcare and other services.

In December 2004, we introduced our Express Recovery^tmprogram, which uses a dedicated unit within a skilled nursing facility to deliver a comprehensive rehabilitation regimen to high-acuity patients. Each Express Recovery^tm unit is staffed separately from the rest of the skilled nursing facility and can typically be entered without using the main facility entrance, permitting residents to bypass portions of the facility dedicated to the traditional nursing home patient. Each Express Recovery^tm unit typically has 12 to 36 beds and provides skilled nursing care and rehabilitation therapy for patients recovering from conditions such as joint replacement surgery, and cardiac and respiratory ailments. Since introducing our Express Recovery^tm program at several of our skilled nursing facilities, our skilled mix at these facilities has increased, resulting in higher reimbursement rates. As of June 30, 2006, we operated 15 Express Recovery^tm units with 399 beds and plan to complete the development of 19 additional Express Recovery^tm units with approximately 243 beds by the end of 2006.

Assisted Living Facilities

We complement our skilled nursing care business by providing assisted living services at 12 facilities with 763 licensed beds, as of June 30, 2006. Our assisted living facilities provide residential accommodations, activities, meals, security, housekeeping and assistance in the activities of daily living to seniors who are independent or who require some support, but not the level of nursing care provided in a skilled nursing facility.

Ancillary Services Segment

Rehabilitation Therapy Services

As of June 30, 2006, we provided physical, occupational and speech therapy services to each of our 60 skilled nursing facilities and to approximately 93 third-party facilities through our Hallmark Rehabilitation subsidiary. We provide rehabilitation therapy services at our skilled nursing facilities as part of an integrated service offering in connection with our skilled nursing care. We believe that an integrated approach to treating high-acuity patients enhances our ability to achieve successful patient outcomes and enables us to identify and treat patients who can benefit from our rehabilitation therapy services. We believe hospitals and physician groups refer high-acuity patients to our skilled nursing facilities because they recognize the value of an integrated approach to providing skilled nursing care and rehabilitation therapy services.

We believe that we have also established a strong reputation as a premium provider of rehabilitation therapy services to third-party skilled nursing operators in our local markets, with a recognized ability to provide these services to high-acuity patients. Our partnership approach to providing rehabilitation therapy services for third-party operators is in contrast to a low-cost strategy and emphasizes high-quality treatment and successful clinical outcomes. As of June 30, 2006, we employed approximately 923 full-time equivalent employees, primarily therapists.

Hospice Care

We provide hospice services in California and Texas through our Hospice Care of the West business. Hospice services focus on the physical, spiritual and psychosocial needs of both terminally ill individuals and their families and consist of palliative and clinical care, education and counseling. Our Hospice Care of the West business received licensure in California and Texas at the end of 2004.

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Our Local Referral Network

Our sales and marketing team of ten regionally-based professionals and over 80 facility-based professionals are responsible for marketing our high-acuity capabilities, which involves developing new referral relationships and managing existing relationships within our local network. These professionals actively call on hospitals, hospital discharge planners, primary care physicians and various community organizations as well as specialty physicians, such as orthopedic surgeons, pulmonologists, neurologists and other medical specialties because these providers frequently treat patients that require comprehensive therapy or other medically complex services that we provide.

We also have established strategic alliances with medical centers in our local markets, including Baylor Healthcare System in Dallas, Texas, St. Joseph’s Hospital in Orange County, California and White Memorial in Los Angeles, California. We believe that forming alliances with leading medical centers improves our ability to attract high-acuity patients to our facilities because we believe that an association with such a medical center typically enhances our reputation for providing high-quality care. As part of these alliances, the medical centers formally evaluate and provide input with respect to our quality of care. We believe these alliances provide us with significantly greater exposure to physicians and discharge staff at these medical centers, strengthening our relationships and reputation with these valuable referral sources. These medical centers may also seek to more rapidly discharge their patients into a facility where the patient will continue to receive high-quality care. As part of the affiliation, we typically commit to admit a contractually negotiated number of charity care patients from the hospital system into our skilled nursing facility and adopt coordinated quality assurance practices.

Payment Sources

We derive revenue primarily from the Medicare and Medicaid programs, managed care payors and from private pay patients. Medicaid typically covers patients that require standard room and board services and provides reimbursement rates that are generally lower than rates earned from other sources. We use our skilled mix as a measure of the quality of reimbursements we receive at our skilled nursing facilities over various periods. Skilled mix is the average daily number of Medicare and managed care patients we serve at our skilled nursing facilities divided by the average daily number of total patients we serve at our skilled nursing facilities. We monitor our quality mix, which is the percentage of non-Medicaid revenue from each of our businesses, to measure the level of more attractive reimbursements that we receive across each of our business units. We believe that our focus on attracting and providing integrated care for high-acuity patients has had a positive effect on our skilled mix and quality mix.

The following table sets forth our Medicare, managed care, private pay/other and Medicaid patient days for our skilled nursing facilities as a percentage of total patient days for our skilled nursing facilities and the level of skilled mix for our skilled nursing facilities:

	Percentage Skilled Nursing Patient Days
	Year Ended December 31,									Six Months Ended June 30,
	2003			2004			2005			2005			2006
Medicare		15.7	%		16.8	%		17.8	%		18.2	%		18.7	%
Managed care		3.4			3.8			4.6			4.6			5.3
Skilled mix		19.1			20.6			22.4			22.8			24.0
Private and other		15.0			14.0			16.2			16.0			16.6
Medicaid		65.9			65.4			61.4			61.2			59.4
Total		100	%		100	%		100	%		100	%		100	%

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The following table sets forth our Medicare, managed care and private pay and Medicaid sources of revenue by percentage of total revenue and the level of quality mix for our company:

	Year Ended December 31,									Six Months Ended June 30,
	2003			2004			2005			2005			2006
										(Unaudited)
Medicare		33.8	%		35.8	%		36.3	%		38.0	%		36.7	%
Managed care and private pay		25.0			25.6			30.2			29.7			31.7
Quality mix		58.8			61.4			66.5			67.7			68.4
Medicaid		41.2			38.6			33.5			32.3			31.6
Total		100	%		100	%		100	%		100	%		100	%

Reimbursement

We receive a majority of our revenue from Medicare and Medicaid. The Medicare and Medicaid programs generated approximately 36.3% and 33.5%, respectively, of our revenue for the year ended December 31, 2005 and approximately 36.7% and 31.6%, respectively, of our revenue for the six months ended June 30, 2006. Medicare and Medicaid are the commonly used names for reimbursement or payment programs governed by certain provisions of the federal Social Security Act. Changes in the reimbursement rates or the system governing reimbursement for these programs directly affect our business. In addition, our rehabilitation therapy and hospice services, for which we typically receive payment from private payors, are significantly dependent on Medicare and Medicaid funding, as those private payors are often reimbursed by these programs. In recent years, federal and state governments have enacted changes to these programs in response to increasing healthcare costs and budgetary constraints See “Risk Factors — We depend heavily on reimbursement from Medicare and Medicaid and payments from these payors may be reduced.” Our ability to remain certified as a Medicare and Medicaid provider depends on our ability to comply with existing and newly enacted laws or new interpretations of existing laws related to these programs. See “Business and Industry — Government Regulation.”

Sources of Reimbursement

Medicare.  Medicare is a federal program and provides certain healthcare benefits to beneficiaries who are 65 years of age or older, blind, disabled or qualify for the End Stage Renal Disease Program. Medicare provides health insurance benefits in two primary parts:

•  Part A.  Hospital insurance, which provides reimbursement for inpatient services for hospitals, skilled nursing facilities and certain other healthcare providers and patients requiring daily professional skilled nursing and other rehabilitative care. Coverage in a skilled nursing facility is limited for a period up to 100 days, if medically necessary, after the individual has qualified for Medicare coverage by a three-day hospital stay. Medicare pays for the first 20 days of stay in a skilled nursing facility in full and the next 80 days above a daily coinsurance amount. Covered services include supervised nursing care, room and board, social services, pharmaceuticals and supplies as well as physical, speech and occupational therapies and other necessary services provided by nursing facilities. Medicare Part A also covers hospice care.

•  Part B.  Supplemental Medicare insurance, which requires the beneficiary to pay monthly premiums, covers physician services, limited drug coverage and other outpatient services, such as physical, occupational and speech therapy services, enteral nutrition, certain medical items and X-ray services received outside of a Part A covered inpatient stay.

To achieve and maintain Medicare certification, a healthcare provider must meet the Centers for Medicare and Medicaid Services, or CMS, “Conditions of Participation” on an ongoing basis, as determined in the facility survey conducted by the state in which such provider is located.

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Medicare pays for inpatient nursing facility services under the Medicare prospective payment system, or PPS. The prospective payment for each beneficiary is based upon the acuity of care needed by the beneficiary. Acuity is determined by an assessment of the patient. Based on this assessment, the patient is assigned to one of the resource utilization grouping categories, or RUGs. Each RUG category corresponds to a fixed per diem rate of reimbursement. Under the PPS, the amount paid to the provider for an episode of care is not related to the provider’s charges or costs of providing that care. CMS adjusts Medicare rates for the RUGs on an annual basis usually on October 1 of each year, and may increase the RUG rates based upon an inflation factor referred to as the “market basket.” A market basket has been generated in each of the eight years since the Medicare PPS became effective in 1998, at an average annual rate of 3.0%. The market basket increase was 3.1% for 2006 and will also be 3.1% for 2007. Until 2006, our facilities received reimbursement for 100% of their Medicare bad debts. As of the beginning of 2006, Medicare reimbursement for skilled nursing facility bad debt was reduced to 70.0%, consistent with the rate paid to hospitals, except for the bad debt attributable to beneficiaries who are entitled to receive Medicare Part A and/or Part B and are eligible to receive some form of Medicaid benefit, referred to as dual-eligible beneficiaries. We do not anticipate a substantial impact from this legislation.

On August 4, 2005, CMS issued a final Medicare payment rule for skilled nursing facilities, that became effective on January 1, 2006. The final rule refined the existing RUG categories and added nine new RUG categories for skilled nursing facility residents who qualify for more extensive services. We believe these RUG changes more accurately pay skilled nursing facilities for the care of residents with medically complex conditions. Additionally, effective January 1, 2006, temporary add-on payments available in prior years expired. We cannot predict whether there will be additional refinement of RUG categories in the future, however CMS has announced that it is engaged in demonstration projects and data collection efforts for purposes of developing future refinements.

Beginning January 1, 2006, the Medicare Modernization Act of December 2003, or MMA, implemented a major expansion of the Medicare program through the introduction of a prescription drug benefit under new Medicare Part D. Medicare beneficiaries who elect Part D coverage and are dual-eligible beneficiaries, are enrolled automatically in Part D and have their outpatient prescription drug costs covered by this new Medicare benefit, subject to certain limitations. Most of the nursing facility residents we serve whose drug costs are currently covered by state Medicaid programs are dual eligible beneficiaries. Accordingly, Medicaid is no longer a significant payor for the prescription pharmacy services provided to these residents. Medicaid will continue as a significant payor for over the counter medications. For more information please refer to “— Reimbursement for Institutional Pharmacy Services, Including Medical Supplies.”

Section 4541 of the BBA requires CMS to impose financial limitations or caps on outpatient physical, speech-language and occupational therapy services by all providers, other than hospital outpatient departments. The law requires a combined cap for physical therapy and speech-language pathology, and a separate cap for occupational therapy, reimbursed under Part B. Due to a series of moratoria enacted subsequent to the BBA, the caps were only in effect in 1999 and for a few months in 2003. With the expiration of the most recent moratorium, the caps were reinstated on January 1, 2006 at $1,740 for the physical therapy and speech therapy cap and $1,740 for the occupational therapy cap. CMS has established an outpatient therapy caps exception process that is effective retroactively to January 1, 2006 for services rendered in 2006. The exception process allows for two types of exceptions to caps for medically necessary services: (1) automatic exceptions; and (2) manual exceptions. Certain diagnoses qualify for an automatic exception to the therapy caps if the condition or complexity has a direct and significant impact on the need for course of therapy being provided and the additional treatment is medically necessary. Manual exceptions require submission of a written request by the beneficiary or provider and medical review by the Medicare fiscal intermediary. If the patient does not have a condition that allows automatic exception, but is believed to require medically necessary services exceeding the caps, the skilled nursing facility may fax a letter requesting up to 15 treatment days of service beyond the cap. Unless extended, these exceptions to the therapy caps will expire on December 31, 2006.

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In addition, on February 6, 2006, the Bush Administration released its fiscal year 2007 budget proposal, which would reduce Medicare spending by $2.5 billion in fiscal year 2007 and $35.9 billion over five years. The budget would, among other things, freeze payments in fiscal year 2007 to skilled nursing facilities. In 2008 and 2009, the payment update for these providers would be market basket minus 0.4%. The budget also proposes to reduce payment updates for hospice services by 0.4% for each of the years 2007 through 2009. To enhance the long-term financing of the Medicare program, the budget also proposes automatic reductions in provider updates if general revenue is projected to exceed 45.0% of total Medicare financing. To date, congressional resolutions have not included these reimbursement cuts, and these proposals would require legislation to be implemented. Nonetheless, Congress may yet consider these and other proposals in the future that would further restrict Medicare funding for skilled nursing facilities and other providers.

CMS’s annual update notice also discusses several initiatives, including plans to: (1) develop an integrated system of post-acute care payment, to make payments for similar services consistent regardless of where the service is delivered; (2) encourage the increased use of health information technology to improve both quality and efficiency in the delivery of post-acute care; (3) assist beneficiaries in their need to be better informed health care consumers by making information about health care pricing and quality accessible and understandable; and (4) accelerate the progress already being made in improving quality of life for nursing home residents.

Medicaid.  Medicaid is a state-administered program financed by state funds and matching federal funds, providing health insurance coverage for certain persons in financial need, regardless of age, and that may supplement Medicare benefits for financially needy persons aged 65 and older. The DRA limits the ability of individuals to become eligible for Medicaid by increasing from three years to five years the time period, known as the “look back period,” in which the transfer of assets by an individual for less than fair market value will render the individual ineligible for Medicaid benefits for nursing home care. Under the DRA, a person that transferred assets for less than fair market value during the look-back period will be ineligible for Medicaid for so long as they would have been able to fund their cost of care absent the transfer or until the transfer would no longer have been made during the look-back period. This period is referred to as the penalty period. The DRA also changes the calculation for determining when the penalty period begins and prohibits states from ignoring small asset transfers and certain other asset transfer mechanisms. Medicaid reimbursement formulas are established by each state with the approval of the federal government in accordance with federal guidelines. Generally, about 50.0% of the funds available under these programs are provided by the federal government under a matching program. Medicaid programs currently exist in all of the states in which we operate our facilities. For fiscal year 2007, between 50% to 76% of the Medicaid funds will be provided by the federal government. The Medicaid program generally permits states to develop their own standards for the establishment of rates and vary in certain respects from state to state. The law requires each state to use a public process for establishing proposed rates whereby the methodology and justification of rates used are available for public review and comment. The states in which we operate currently use cost-based or price-based reimbursement systems. Under cost-based reimbursement systems, the facility is reimbursed for the reasonable direct and indirect allowable costs it incurred in a base year in providing routine resident care services as defined by the program. The reimbursements received under a cost-based reimbursement system are updated each year for inflation. In certain states, efficiency incentives are provided and facilities may be subject to cost ceilings. Reasonable costs normally include certain allowances for administrative and general costs, as well as the cost of capital or investment in the facility, which may be transformed into a fair rental or cost of capital charge for property and equipment.

The reimbursement formulas employed by the state may be categorized as prospective or retrospective in nature. Under a prospective cost-based system, per diem rates are established based upon the historical cost of providing services (usually during a prior base year) adjusted to reflect factors such as inflation and any additional services required. Many of the prospective payment systems under which we operate contain an acuity measurement system, which adjusts rates based on the care needs of the resident. Retrospective systems operate similar to the pre-PPS Medicare program where skilled nursing facilities are paid on an

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interim basis for services provided, subject to adjustments based on allowable costs, which are generally submitted on an annual basis.

Each state has relatively broad discretion in the reimbursement methodology and amounts paid for services. In 2005, California switched from a prospective payment system to a prospective cost-based system for free-standing nursing facilities that reflects the costs and staffing levels associated with quality of care for residents at these facilities. California levies a tax on skilled nursing facilities in the amount of $7.31 per patient day, which is collected one month in arrears. The law under which this tax is levied is scheduled to expire on July 31, 2008, unless a later enacted statute extends this date. Also in 2005, California effected a retroactive cost of living adjustment to its existing average Medi-Cal reimbursement rate for the 2004/2005 rate year.

In Texas, skilled nursing facility services are reimbursed at per diem rates determined for 11 patient acuity mix classes of service. Costs are projected from the historical cost period to the prospective rate period and account for economic changes and changes in occupancy and utilization. On March 24, 2006, the Texas state legislature approved an administrative increase in Texas Medicaid rates of approximately 11.0%, to be made retroactively effective to January 1, 2006.

In Kansas, skilled nursing facilities are paid prospectively determined daily rates determined using a prospective facility specific rate setting system. The rate is determined for base year cost data submitted by the provider and adjusted for case mix. Certain costs are adjusted for inflation annually based on a market basket index.

In Missouri, skilled nursing facilities are reimbursed based on a cost-based rate determined on a base year cost updated for inflation or pursuant to a patient care median. The current base year is 2001. Missouri levies a tax on skilled nursing facilities in the amount of $8.42 per patient day, plus a small redistribution fee based on the additional funds raised by the provider tax. The tax is collected via an automatic deduction from the Medicaid remittance advice.

In Nevada, free-standing skilled nursing facilities are paid a prospective per diem rate that is adjusted for patient acuity mix and designed to cover all costs except those currently associated with property, return on equity, and certain ancillaries. Property cost is reimbursed at prospective rate for each facility. Nevada levies a tax on skilled nursing facilities in the amount of $14.12 per non-Medicare patient day, which is collected one month in arrears.

The U.S. Department of Health and Human Services has established a Medicaid Advisory Commission charged with recommending ways Congress can reduce Medicaid spending growth and restructure the program. The commission is expected to recommend ways to reduce Medicaid spending growth by up to $10.0 billion over five years in a report expected to be issued by December 31, 2006.

Managed Care.  Our managed care patients consist of individuals who are insured by a third-party entity, typically called a senior HMO plan, or are Medicare beneficiaries who assign their Medicare benefits to a senior HMO plan.

Private Pay and Other.  Private pay and other sources consist primarily of individuals or parties who directly pay for their services or are beneficiaries of the Department of Veterans Affairs or hospice beneficiaries not enrolled in Medicare.

Reimbursement for Specific Services

Reimbursement for Skilled Nursing Services.  Skilled nursing facility revenue is primarily derived from Medicare and Medicaid reimbursement, as discussed above.

Our skilled nursing facilities also provide Medicaid-covered services to eligible individuals consisting of nursing care, room and board and social services. In addition, states may at their option cover other services such as physical, occupational and speech therapies.

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Reimbursement for Assisted Living Services.  Assisted living facility revenue is primarily derived from private pay residents at rates we establish based upon the services we provide and market conditions in the area of operation. In addition, Medicaid or other state specific programs in some states where we operate supplement payments for board and care services provided in assisted living facilities.

Reimbursement for Rehabilitation Therapy Services.  Our rehabilitation therapy services operations receive payment for services from affiliated and non-affiliated skilled nursing facilities and assisted living facilities that they serve. The payments are based on contracts with customers with negotiated patient per diem rates or a negotiated fee schedule based on the type of service rendered. Various federal and state laws and regulations govern reimbursement for rehabilitation therapy services to long-term care facilities and other healthcare providers participating in Medicare, Medicaid and other federal and state healthcare programs.

Some of our rehabilitation therapy revenues are paid by the Medicare Part B program under a fee schedule. Congress has established annual caps that limit the amounts that can be paid (including deductible and coinsurance amounts) for rehabilitation therapy services rendered to any Medicare beneficiary under Part B. The law requires a combined cap for physical therapy and speech-language pathology and a separate cap for occupational therapy. Due to a series of moratoria by Congress, the caps were only in effect in 1999 and for a few months in 2003. With the expiration of the most recent moratorium, the caps were reinstated on January 1, 2006 at $1,740 for the physical therapy/speech therapy cap and $1,740 for the occupational therapy cap. The DRA directed CMS to create a process to allow exceptions to therapy caps for certain medically necessary services provided on or after January 1, 2006. Unless extended, these exceptions will expire on December 31, 2006. The exceptions process allows for two types of exceptions to the caps for medically necessary services:

•  Automatic Exceptions.  Automatic exceptions for certain enumerated “conditions or complexities” are allowed without a written request when the conditions and complexities are appropriately provided and documented. CMS anticipates that the majority of beneficiaries who require services in excess of the caps will qualify for automatic exceptions.

•  Manual Exceptions.  Manual exceptions are available if the patient does not have a condition or complexity that allows automatic exception, but is believed to require medically necessary services exceeding the caps. In such cases, the provider may submit a request for up to 15 treatment days of service beyond the cap. The request must include medical justification for the exception. The fiscal intermediaries will make a decision on the number of treatment days they determine are medically necessary within 10 business days. We cannot predict the availability of manual exceptions.

The federal and state reimbursement and fraud and abuse laws and regulations are applicable to our rehabilitation therapy services operations because the services we provide to our customers, including affiliated entities, are paid under Medicare, Medicaid and other federal and state healthcare programs. We could also be affected if we violate the laws in our arrangements with patients or referral sources. Also, if our customers fail to comply with these laws and regulations they could be subject to possible sanctions, including loss of licensure or eligibility to participate in reimbursement programs, as well as civil and criminal penalties, which could adversely affect our rehabilitation therapy operations, including our financial results. Our customers will also be affected by the Medicare Part B outpatient rehabilitation therapy cap discussed above.

Reimbursement for Hospice Services.  For a Medicare beneficiary to qualify for the Medicare hospice benefit, two physicians must certify that, in the best judgment of the physician or medical director, the beneficiary has less than six months to live, assuming the beneficiary’s disease runs its normal course. In addition, the Medicare beneficiary must affirmatively elect hospice care and waive any rights to other Medicare benefits related to his or her terminal illness. Each benefit period, a physician must re-certify that the Medicare beneficiary’s life expectancy is six months or less in order for the beneficiary to continue to qualify for and to receive the Medicare hospice benefit. The first two benefit periods are measured at 90-day intervals and subsequent benefit periods are measured at 60-day intervals. There is no limit on the

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number of periods that a Medicare beneficiary may be re-certified. A Medicare beneficiary may revoke his or her election at any time and begin receiving traditional Medicare benefits.

Medicare reimburses for hospice care using a prospective payment system. Under that system, we receive one of four predetermined daily or hourly rates based on the level of care we furnish to the beneficiary. These rates are subject to annual adjustments based on inflation and geographic wage considerations.

Medicare limits the reimbursement we may receive for inpatient care services. If the number of inpatient care days furnished by us to Medicare beneficiaries exceeds 20.0% of the total days of hospice care furnished by us to Medicare beneficiaries, Medicare payments to us for inpatient care days exceeding the 20.0% inpatient cap will be reduced to the routine home care rate. This determination is made annually based on the twelve-month period beginning on November 1st of each year.

We are required to file annual cost reports with the U.S. Department of Health and Human Services for informational purposes and to submit claims based on the location where we actually furnish the hospice services. These requirements permit Medicare to adjust payment rates for regional differences in wage costs.

Reimbursement for Institutional Pharmacy Services, Including Medical Supplies.  Under Medicare Part A, which covers, among other things, inpatient hospital, skilled long-term care, home healthcare and certain other healthcare services, skilled nursing facilities are financially responsible for purchasing drugs required by patients covered under Part A. Our pharmacy business receives payment for services from the affiliated and non-affiliated skilled nursing facilities that it serves. The payments to the pharmacy are based on negotiated per diem rates or negotiated fee schedules based on the type of prescription drugs or services provided.

Dual-eligible beneficiaries, who are not in a Medicare Part A stay, are entitled to coverage of prescription drugs under Medicaid. Pharmacies are generally paid directly by Medicaid. The federal Medicaid statute specifies a variety of requirements that the state plan must meet, including the requirements related to eligibility, coverage of services, payment and administration.

The MMA included a major expansion of the Medicare program through the introduction of an outpatient prescription drug benefit under new Medicare Part D. Part D covers drugs and biologicals that are dispensed under a prescription, including insulin and associated products, for eligible patients that elect to enroll in the program. Under Part D, outpatient prescription drug benefits are provided by private risk-bearing entities called independent prescription drug plans (PDPs) or comprehensive managed care plans under Part C (now called Medicare Advantage Plans). These plans each have a formula which includes drugs from each therapeutic category, and are paid by Medicare Part D. The plans in turn contract with pharmacies to provide the drugs to patients. Part D requires these plans to provide convenient patient access and standard contracts to all long-term care pharmacies that meet performance standards specified by CMS.

Effective January 1, 2006, there is also Medicare coverage for outpatient prescription drugs for dual-eligible beneficiaries who are automatically enrolled in Part D. Most dual-eligible beneficiary residents of nursing facilities are eligible for full prescription coverage with no deductibles and low co-payments up to an out-of-pocket threshold, after which benefits are fully covered. Medicaid only eligible patients continue to receive drug benefits from Medicaid. Some states continue to provide Medicaid coverage for classes of drugs not covered under Part D.

Certain drugs are excluded from coverage under the new Medicare benefits in Part D, including several drugs that are commonly prescribed for nursing home and other long-term care residents. For example, non-prescription drugs, vitamins and minerals and over-the-counter pain relievers are not covered. As a result, there is a risk that if these excluded drug costs are not reimbursed under Medicaid or through Medicare, our facilities and our patients will need to bear the cost of these items.

We will continue to review the Medicare Part D regulations. We cannot assess the overall impact of Part D coverage on our institutional pharmacy business. The impact of this legislation depends upon a

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variety of factors, including the sub-regulatory guidance from CMS, our ultimate relationships with the Part D Plans and the patient mix of our customers.

Government Regulation

General

Healthcare is an area of extensive and frequent regulatory change. We provide healthcare services through our operating subsidiaries. In order to operate nursing facilities and provide healthcare services, our subsidiaries that operate these facilities must comply with federal, state and local laws relating to licensure, delivery and adequacy of medical care, distribution of pharmaceuticals, equipment, personnel, operating policies, fire prevention, rate setting, building codes and environmental protection. Changes in the law or new interpretations of existing laws may have a significant impact on our methods and costs of doing business.

Governmental and other authorities periodically inspect our skilled nursing facilities and assisted living facilities to assure that we continue to comply with their various standards. We must pass these inspections to continue our licensing under state law, to obtain certification under the Medicare and Medicaid programs and to continue our participation in the Veterans Administration program at some facilities. We can only participate in other third-party programs if our facilities pass these inspections. In addition, government authorities inspect our record keeping and inventory control of controlled narcotics. From time to time, we, like others in the healthcare industry, may receive notices from federal and state regulatory agencies alleging that we failed to comply with applicable standards. These notices may require us to take corrective action, and may impose civil monetary penalties and other operating restrictions on us. If our skilled nursing facilities fail to comply with these directives or otherwise fail to comply substantially with licensure and certification laws, rules and regulations, we could lose our certification as a Medicare or Medicaid provider or lose our state licenses to operate the facilities.

Civil and Criminal Fraud and Abuse Laws and Enforcement

Federal and state healthcare fraud and abuse laws regulate both the provision of services to government program beneficiaries and the methods and requirements for submitting claims for services rendered to such beneficiaries. Under these laws, individuals and organizations can be penalized for submitting claims for services that are not provided, that have been inadequately provided, billed in an incorrect manner or other than as actually provided, not medically necessary, provided by an improper person, accompanied by an illegal inducement to utilize or refrain from utilizing a service or product, or billed or coded in a manner that does not otherwise comply with applicable governmental requirements. Penalties also may be imposed for violation of anti-kickback and patient referral laws.

Federal and state governments have a range of criminal, civil and administrative sanctions available to penalize and remediate healthcare fraud and abuse, including exclusion of the provider from participation in the Medicare and Medicaid programs, fines, criminal and civil monetary penalties and suspension of payments and, in the case of individuals, imprisonment.

We have internal policies and procedures and have implemented a compliance program in order to reduce exposure for violations of these and other laws and regulations. However, because enforcement efforts presently are widespread within the industry and may vary from region to region, we cannot assure you that our compliance program will significantly reduce or eliminate exposure to civil or criminal sanctions or adverse administrative determinations.

Anti-Kickback Statute

Provisions in Title XI of the Social Security Act, commonly referred to as the Anti-Kickback Statute, prohibit the knowing and willful offer, payment, solicitation or receipt of anything of value, directly or indirectly, in return for the referral of patients or arranging for the referral of patients, or in return for the recommendation, arrangement, purchase, lease or order of items or services that are covered by a federal

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healthcare program such as Medicare or Medicaid. Violation of the Anti-Kickback Statute is a felony, and sanctions for each violation include imprisonment of up to five years, criminal fines of up to $25,000, civil monetary penalties of up to $50,000 per act plus three times the amount claimed or three times the remuneration offered, and exclusion from federal healthcare programs (including Medicare and Medicaid). Many states have adopted similar prohibitions against kickbacks and other practices that are intended to induce referrals applicable to all payors.

We are required under the Medicare conditions of participation and some state licensing laws to contract with numerous healthcare providers and practitioners, including physicians, hospitals and nursing homes, and to arrange for these individuals or entities to provide services to our patients. In addition, we have contracts with other suppliers, including pharmacies, ambulance services and medical equipment companies. Some of these individuals or entities may refer, or be in a position to refer, patients to us, and we may refer, or be in a position to refer, patients to these individuals or entities. Certain safe harbor provisions have been created, and compliance with a safe harbor ensures that the contractual relationship will not be found in violation of the Anti-Kickback Statute. We attempt to structure these arrangements in a manner that meets the terms of one of the safe harbor regulations. Some of these arrangements may not meet all of the requirements. However, failure to meet the safe harbor does not render the contract illegal.

We believe that our contracts and arrangements with providers, practitioners and suppliers should not be found to violate the Anti-Kickback Statute or similar state laws. We cannot guarantee however, that these laws will ultimately be interpreted in a manner consistent with our practices.

If we are found to be in violation of the Anti-Kickback Statute we could be subject to civil and criminal penalties, and we could be excluded from participating in federal and state healthcare programs such as Medicare and Medicaid. The occurrence of any of these events could significantly harm our business and financial condition.

Stark Law

Congress has also passed a significant prohibition against certain physician referrals of patients for healthcare services, commonly known as the Stark Law. The Stark Law prohibits a physician from making referrals for particular healthcare services (called “designated health services”) to entities with which the physician, or an immediate family member of the physician, has a financial relationship if the services are payable by Medicare or Medicaid. If any arrangement is covered by the Stark Law, the requirements of a Stark Law exception must be met for the physician to be able to make referrals to the entity for designated health services and for the entity to be able to bill for these services. Although the term “designed health services” does not include long-term care services, some of the services provided by our skilled nursing facilities and other related business units are classified as designated health services including physical, speech and occupational therapy, pharmacy and hospice services. The term “financial relationship” is defined very broadly to include most types of ownership or compensation relationships. The Stark Law also prohibits the entity receiving the referral from seeking payment from the patient or the Medicare and Medicaid programs for services rendered pursuant to a prohibited referral. If an entity is paid for services rendered pursuant to a prohibited referral, it may incur civil penalties and could be excluded from participating in any federal and state healthcare programs.

The Stark Law contains exceptions for certain physician ownership or investment interests in, and certain physician compensation arrangements with, entities. If a compensation arrangement or investment relationship between a physician, or immediate family member, and an entity satisfies all requirements for a Stark Law exception, the Stark Law will not prohibit the physician from referring patients to the entity for designated health services. The exceptions for compensation arrangements cover employment relationships, personal services contracts and space and equipment leases, among others.

If an entity violates the Stark Law, it could be subject to civil penalties of up to $15,000 per prohibited claim and up to $100,000 for knowingly entering into certain prohibited cross-referral schemes. The entity also may be excluded from participating in federal and state healthcare programs, including Medicare and Medicaid. If the Stark Law was found to apply to our relationships with referring physicians and no

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exception under the Stark Law were available, we would be required to restructure these relationships or refuse to accept referrals for designated health services from these physicians. If we were found to have submitted claims to Medicare or Medicaid for services provided pursuant to a referral prohibited by the Stark Law, we would be required to repay any amounts we received from Medicare or Medicaid for those services and could be subject to civil monetary penalties. Further, we could be excluded from participating in Medicare and Medicaid and other federal and state healthcare programs. If we were required to repay any amounts to Medicare or Medicaid, subjected to fines, or excluded from the Medicare and Medicaid Programs, our business and financial condition would be harmed significantly.

Many states have physician relationship and referral statutes that are similar to the Stark Law. These laws generally apply regardless of payor. We believe that our operations are structured to comply with applicable state laws with respect to physician relationships and referrals. However, any finding that we are not in compliance with these state laws could require us to change our operations or could subject us to penalties. This, in turn, could have a negative affect on our operations.

False Claims

Federal and state laws prohibit the submission of false claims and other acts that are considered fraudulent or abusive. The submission of claims to a federal or state healthcare program for items and services that are “not provided as claimed” may lead to the imposition of civil monetary penalties, criminal fines and imprisonment, and/or exclusion from participation in state and federally funded healthcare programs, including the Medicare and Medicaid programs. Allegations of poor quality of care can also lead to false claims suits as prosecutors allege that the provider has represented to the program that adequate care is provided and the lack of quality care causes the service to be “not provided as claimed.”

Under the Federal False Claims Act, actions against a provider can be initiated by the federal government or by a private party on behalf of the federal government. These private parties, whistleblowers, are often referred to as qui tam relators, and relators are entitled to share in any amounts recovered by the government. Both direct enforcement activity by the government and qui tam actions have increased significantly in recent years. The use of private enforcement actions against healthcare providers has increased dramatically, in part because the relators are entitled to share in a portion of any settlement or judgment. This development has increased the risk that a healthcare company will have to defend a false claims action, pay fines or settlement amounts or be excluded from the Medicare and Medicaid programs and other federal and state healthcare programs as a result of an investigation arising out of false claims laws. Many states have enacted similar laws providing for imposition of civil and criminal penalties for the filing of fraudulent claims. Due to the complexity of regulations applicable to our industry, we cannot guarantee that we will not in the future be the subject of any actions under the Federal False Claims Act or similar state law.

Health Insurance Portability and Accountability Act of 1996

The federal Health Insurance Portability and Accountability Act of 1996, commonly known as HIPAA, created two new federal crimes: healthcare fraud and false statements relating to healthcare matters. The healthcare fraud statute prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government sponsored programs. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines or imprisonment as well as exclusion from participation in federal and state health care programs.

In addition, HIPAA established uniform standards governing the conduct of certain electronic healthcare transactions and protecting the privacy and security of certain individually identifiable health information. Three standards have been promulgated under HIPAA with which we currently are required to comply. First, we must comply with HIPAA’s standards for electronic transactions, which establish

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standards for common healthcare transactions, such as claims information, plan eligibility, payment information and the use of electronic signatures. We have been required to comply with these standards since October 16, 2003. We must also comply with the standards for the privacy of individually identifiable health information, which limit the use and disclosure of most paper and oral communications, as well as those in electronic form, regarding an individual’s past, present or future physical or mental health or condition, or relating to the provision of healthcare to the individual or payment for that healthcare, if the individual can or may be identified by such information. We were required to comply with these standards by April 14, 2003. Finally, we must comply with HIPAA’s security standards, which require us to ensure the confidentiality, integrity and availability of all electronic protected health information that we create, receive, maintain or transmit, to protect against reasonably anticipated threats or hazards to the security of such information, and to protect such information from unauthorized use or disclosure. We were required to comply with these standards by April 21, 2005.

In addition, in January 2004, CMS published a rule announcing the adoption of the National Provider Identifier as the standard unique health identifier for healthcare providers to use in filing and processing healthcare claims and other transactions. This rule became effective May 23, 2005, with a compliance date of May 23, 2007. We believe that we are in material compliance with these standards. However, if our practices, policies and procedures are found not to comply with these standards, we could be subject to criminal penalties and civil sanctions.

State Privacy Laws

States also have laws that apply to the privacy of healthcare information. We must comply with these state privacy laws to the extent that they are more protective of healthcare information or provide additional protections not afforded by HIPAA. Where we are subject to these state laws, it may be necessary to modify our operations or procedures to comply with them, which may entail significant and costly changes for us. We believe that we are in material compliance with applicable state privacy and security laws. However, if we fail to comply with these laws, we could be subject to additional penalties and/or sanctions.

Certificates of Need and Other Regulatory Matters

Certain states administer a certificate of need program which applies to the incurrence of capital expenditures, the offering of certain new institutional health services, the cessation of certain services and the acquisition of major medical equipment. Such legislation also stipulates requirements for such programs, including that each program both be consistent with the respective state health plan in effect pursuant to such legislation and provide for penalties to enforce program requirements. To the extent that certificates of need or other similar approvals are required for expansion of our operations, either through facility acquisitions, expansion or provision of new services or other changes, such expansion could be affected adversely by the failure or inability to obtain the necessary approvals, changes in the standards applicable to such approvals or possible delays and expenses associated with obtaining such approvals.

State Facility Operating License Requirements

Nursing homes, pharmacies, and hospices are required to be individually licensed or certified under applicable state law and as a condition of participation under the Medicare program. In addition, health care professionals and practitioners providing health care are required to be licensed in most states. We believe that our operating subsidiaries that provide these services have all required regulatory approvals necessary for our current operations. The failure to obtain, retain or renew any required license or could adversely affect our operations, including our financial results.

Rehabilitation License Requirements

Our rehabilitation therapy services operations are subject to various federal and state regulations, primarily regulations of individual practitioners. Therapists and other healthcare professionals employed by us are required to be individually licensed or certified under applicable state law. We take measures to

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ensure that therapists and other healthcare professionals are properly licensed. In addition, we require therapists and other employees to participate in continuing education programs. The failure to obtain, retain or renew any required license or certifications by therapists or other healthcare professionals could adversely affect our operations, including our financial results.

Regulation of our Joint Venture Institutional Pharmacy

Our joint venture institutional pharmacy operations, which include medical equipment and supplies, are subject to extensive federal, state and local regulation relating to, among other things, operational requirements, reimbursement, documentation, licensure, certification and regulation of pharmacies, pharmacists, drug compounding and manufacture and controlled substances.

Institutional pharmacies are regulated under the Food, Drug and Cosmetic Act and the Prescription Drug Marketing Act, which are administered by the U.S. Food and Drug Administration. Under the Comprehensive Drug Abuse Prevention and Control Act of 1970, which is administered by the U.S. Drug Enforcement Administration, dispensers of controlled substances must register with the Drug Enforcement Administration, file reports of inventories and transactions and provide adequate security measures. Failure to comply with such requirements could result in civil or criminal penalties. The Medicare and Medicaid programs also establish certain requirements for participation of pharmacy suppliers. Our institutional pharmacy joint venture is also subject to federal and state laws that govern financial arrangements between healthcare providers, including the Anti-Kickback Statute under “— Anti-Kickback Statute.”

Competition

Our facilities compete primarily on a local and regional basis with many long-term care providers, from national and regional chains to smaller provides owning as few as a single nursing center. We also compete with inpatient rehabilitation facilities and long-term acute care hospitals. Our ability to compete successfully varies from location to location and depends on a number of factors, which include the number of competing facilities in the local market, the types of services available, quality of care, reputation, age and appearance of each facility and the cost of care in each location with respect to private pay residents.

We seek to compete effectively in each market by establishing a reputation within the local community for quality of care, attractive and comfortable facilities and providing specialized healthcare with an emphasized focus on high-acuity patients. Programs targeting high-acuity patients, including our Express Recovery^tm units, generally have a higher staffing level per patient than our other inpatient facilities and compete more directly with inpatient rehabilitation facilities and long-term acute-care hospitals. We believe that the average cost to a third-party payor for the treatment of our typical high-acuity patient is lower if that patient is treated in one of our facilities than if that same patient were to be treated in an inpatient rehabilitation facility or long-term acute-care hospital.

Our other services, such as rehabilitation therapy provided to third-party facilities and hospice care also compete with local, regional, and national companies. The primary competitive factors in these businesses are similar to those for our skilled nursing care facilities and include reputation, the cost of services, the quality of clinical services, responsiveness to patient needs and the ability to provide support in other areas such as third-party reimbursement, information management and patient record-keeping.

Increased competition could limit our ability to attract and retain patients, maintain or increase rates or to expand our business. Some of our competitors have greater financial and other resources than we have, may have greater brand recognition and may be more established in their respective communities than we are. Competing companies may also offer newer facilities or different programs or services than us and may therefore attract our patients who are presently residents of our facilities, potential residents of our facilities, or who are otherwise receiving our healthcare services. Other competitors may accept lower margins and, therefore, may present significant price competition.

Although non-profit organizations continue to run approximately two-thirds of hospice programs, for-profit companies have recently began to occupy a larger share of the hospice market. Increasing public

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awareness of hospice services, the aging of the U.S. population and favorable reimbursement by Medicare, the primary payor, have contributed to the recent growth in the hospice care market. As more companies enter the market to provide hospice services, we will face increasing competitive pressure.

Labor

Our most significant operating cost is labor. Our labor costs consist of salaries, wages and benefits including workers’ compensation but excluding non-cash stock based compensation expense. We seek to manage our labor costs by improving nurse staffing retention, maintaining competitive labor rates, and reducing reliance on overtime compensation and temporary nursing agency services. Labor costs accounted for approximately 63.4%, 64.3% and 63.5% of our operating expenses for the year ended December 31, 2005 and for the six months ended June 30, 2005 and 2006, respectively.

Risk Management

We have developed a risk management program designed to stabilize our insurance and professional liability costs. As part of this program, we have implemented an arbitration agreement system at each of our facilities under which, upon admission, patients are asked to execute an agreement that requires disputes to be arbitrated prior to filing a lawsuit. We believe that this has significantly reduced our liability exposure. We have also established an incident reporting process that involves monthly follow-up with our facility administrators to monitor the progress of claims and losses. We believe that our emphasis on providing high-quality care and our attention to monitoring quality of care indicators has also helped to reduce our liability exposure.

Insurance

We maintain insurance for general and professional liability, workers’ compensation and employers’ liability, employee benefits liability, property, casualty, directors and officers, surety bonds, crime, boiler and machinery, automobile, employment practices liability, earthquake and flood. We believe that our insurance programs are adequate and that our reserves appropriately reflect our exposure to potential liabilities. We do not recognize a liability in our consolidated financial statements in those instances where we have directly transferred the risk to the insurance carrier.

General and Professional Liability Insurance

In California, Texas and Nevada, we have professional and general liability insurance with an occurrence limit of $2 million per loss and an annual aggregate coverage for all facilities in these states limit of $6 million. In Kansas, we have occurrence based professional and general liability insurance with an occurrence limit of $1 million per loss and an annual aggregate coverage limit of $3 million for each individual facility. In Missouri, we have claims-made based professional and general liability insurance with an occurrence limit of $1 million per loss and an annual aggregate coverage limit of $3 million for each individual facility. We have also purchased excess general and professional liability insurance coverage providing an additional $12 million of coverage for losses arising from any claims in excess of $3 million. We also maintain a $1 million self-insured professional and general liability retention per claim in California, Nevada and Texas. We maintain no deductibles in Kansas and Missouri. Additionally, we self insure the first $1 million per workers’ compensation claim in each of California and Nevada. We purchase workers’ compensation policies for Kansas and Missouri with no deductibles. We have elected to not carry workers’ compensation insurance in Texas.

Due to our self-insured retentions under our professional and general liability programs, there is no limit on the maximum number of claims or amount for which we can be liable in any policy period. We base our loss estimates on independent actuarial analyses, which determine expected liabilities on an undiscounted basis, including incurred but not reported losses, based upon the available information on a given date. It is possible, however, for the ultimate amount of losses to exceed our estimates and our

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insurance limits. In the event our actual liability exceeds our estimates for any given period, our results of operations and financial condition could be materially adversely affected.

Workers’ Compensation

We have maintained workers’ compensation insurance as statutorily required. Most of our commercial workers’ compensation insurance purchased is loss sensitive in nature. As a result, we are responsible for adverse loss development. Additionally, we self-insure the first unaggregated $1.0 million per workers’ compensation claim in both California and Nevada.

In April 2004, California enacted workers’ compensation reform legislation designed to address specific problems in the workers’ compensation system and reduce workers’ compensation insurance expenses. The legislation, among other things, established an independent medical review process for resolving medical disputes, tightened standards for determining impairment ratings and capped temporary total disability payments to 104 weeks from the first payment.

We have elected to not carry workers’ compensation insurance in Texas and we may be liable for negligence claims that are asserted against us by our employees.

We purchase guaranteed cost policies for Kansas and Missouri. There are no deductibles associated with these programs.

Tort Reform

In September 2003, Texas tort law was reformed to impose a $250,000 cap on the noneconomic damages, such as pain and suffering, that claimants can recover in a malpractice lawsuit against a single health care institution and an aggregate $500,000 cap on the amount of such damages that claimants can recover in malpractice lawsuits against more than one health care institution. The law also provides a $1.4 million cap, subject to future adjustment for inflation, on recovery, including punitive damages, in wrongful death and survivor actions on a healthcare liability claim.

In California, tort reform laws since 1975 have imposed a $250,000 cap on the noneconomic damages, such as pain and suffering, that claimants can recover in an action for injury against a healthcare provider based on negligence. California law also provides for additional remedies and recovery of attorney fees for certain claims of elder or dependant adult abuse or neglect, although non-economic damages in medical malpractice cases are capped. California does not provide a cap on actual, provable damages in such claims or claims for fraud, oppression or malice.

Nevada tort law was reformed in August of 2002 to impose a $350,000 cap on non-economic damages for medical malpractice or dental malpractice. Punitive damages may only be awarded in tort actions for fraud, oppression, or malice, and are limited to the greater of $300,000 or three times compensatory damages.

In 2005, Missouri amended its tort law to impose a $350,000 cap on non-monetary damages and to limit awards for punitive damages to the greater of $500,000 or five times the net amount of the judgment.

Kansas currently limits damages awarded for pain and suffering, and all other non-economic damages, to $250,000. Kansas also limits the award of punitive damages to the lesser of a defendant’s highest annual gross income for the prior five years or $5 million. However, to the extent any gain from misconduct exceeds these limits, the court may alternatively award damages of up to 1.5 times the amount of such gain.

Environmental Matters

We are subject to a wide variety of federal, state and local environmental and occupational health and safety laws and regulations. As a healthcare provider, we face regulatory requirements in areas of air and water quality control, medical and low-level radioactive waste management and disposal, asbestos management, response to mold and lead-based paint in our facilities and employee safety.

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In our role as owner and/or operator of our facilities, we also may be required to investigate and remediate hazardous substances that are located on the property, including any such substances that may have migrated off, or discharged or transported from the property. Part of our operations involves the handling, use, storage, transportation, disposal and/or discharge of hazardous, infectious, toxic, flammable and other hazardous materials, wastes, pollutants or contaminants. These activities may result in damage to individuals, property or the environment; may interrupt operations and/or increase costs; may result in legal liability, damages, injunctions or fines; may result in investigations, administrative proceedings, penalties or other governmental agency actions; and may not be covered by insurance. We believe that we are in material compliance with applicable environmental and occupational health and safety requirements. However, we cannot assure you that we will not encounter environmental liabilities in the future, and such liabilities may result in material adverse consequences to our operations or financial condition.

Customers

No individual customer or client accounts for a significant portion of our revenue. We do not expect that the loss of a single customer or client would have a material adverse effect on our business, results of operations or financial condition.

Legal Proceedings

We are involved in legal proceedings and regulatory enforcement investigations regarding facility surveys from time to time in the ordinary course of our business. We do not believe the outcome of these proceedings and investigations will have a material adverse effect on our business, financial condition or results of operations.

Employees

As of June 30, 2006, we employed approximately 6,385 full-time-equivalent employees, including both full-time and part-time employees, and operated under five collective bargaining agreements with a union covering approximately 247 full-time employees at five of our facilities located in California. We generally consider our relationships with our employees to be satisfactory.

Properties

As of June 30, 2006, we operated 72 skilled nursing and assisted living facilities, of which we owned 52 and leased 20. As of June 30, 2006, our operated facilities had a total of 8,249 licensed beds.

The following table provides information by state as of June 30, 2006 regarding the skilled nursing and assisted living facilities we owned and leased.

	Owned Facilities				Leased Facilities				Total Facilities
			Licensed				Licensed				Licensed
	Number		Beds		Number		Beds		Number		Beds
California		13		1,423		18		2,158		31		3,581
Texas		21		3,173		—		—		21		3,173
Kansas		15		762		—		—		15		762
Missouri		3		443		—		—		3		443
Nevada		—		—		2		290		2		290
Total		52		5,801		20		2,448		72		8,249
Skilled nursing		42		5,260		18		2,182		60		7,442
Assisted living		10		541		2		266		12		807

Our executive offices are located in Foothill Ranch, California where we lease approximately 26,433 square feet of office space, a portion of which is utilized for the administrative functions of our

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hospice and our Hallmark businesses. The term of this lease expires in October 2011. We have an option to renew our lease at this location for an additional five-year term.

Company History

We were incorporated in Delaware in October 2005. In 1998, we acquired Summit Care, a publicly-traded long-term care company with nursing facilities in California, Texas and Arizona. On October 2, 2001, we and 19 of our subsidiaries filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code and on November 28, 2001, our remaining three subsidiaries also filed voluntary petitions for protection under Chapter 11. In August 2003, we emerged from bankruptcy, paying or restructuring all debt holders in full, paying all accrued interest expenses and issuing 5.0% of our common stock to former bondholders. In connection with our emergence from bankruptcy, we engaged in a series of transactions, including out disposition in March 2005 of our California pharmacy business, selling two institutional pharmacies in southern California.

On December 27, 2005, Onex and certain members of our management purchased our business in a merger for $645.7 million.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth certain information about our executive officers and members of our board of directors as of June 30, 2006.

Name	Age		Position
Boyd Hendrickson		62	Chairman of the Board, Chief Executive Officer and Director
Jose Lynch		36	President, Chief Operating Officer and Director
John E. King		45	Treasurer and Chief Financial Officer
Roland Rapp		45	General Counsel, Secretary and Chief Administrative Officer
Mark Wortley		51	Executive Vice President and President of Ancillary Subsidiaries
Peter A. Reynolds		48	Senior Vice President of Finance and Chief Accounting Officer
Susan Whittle		58	Senior Vice President and Chief Compliance Officer
Robert M. Le Blanc(1)(2)		40	Lead Director
Michael E. Boxer(1)		45	Director
John M. Miller, V(1)		54	Director
Glenn S. Schafer(2)		56	Director
William Scott(2)		69	Director

(1)	Member of our Audit Committee.
(2)	Member of our Compensation Committee.

Boyd Hendrickson, 62, Chairman of the Board, Chief Executive Officer and Director.  Mr. Hendrickson has served as our Chief Executive Officer since April 2002, as a member of our board of directors since August 2003 and was appointed Chairman of the Board in April 2005. Before joining us, Mr. Hendrickson served as President and Chief Executive Officer for Evergreen Healthcare, Inc., an operator of long-term healthcare facilities, from January 2000 to April 2002. From 1988 to January 2000, Mr. Hendrickson served in various senior management roles, including President and Chief Operating Officer, of Beverly Enterprises, Inc., one of the nation’s largest long-term healthcare companies, where he also served on the board of directors. Mr. Hendrickson was also co-founder, President and Chief Operating Officer of Care Enterprises, and Chairman and Chief Executive Officer of Hallmark Health Services. Mr. Hendrickson also serves on the Board of Directors of LTC Properties, Inc.

Jose Lynch, 36, President, Chief Operating Officer and Director.  Mr. Lynch has served as our President since February 2002, as our Chief Operating Officer since December 27, 2005 and has served as a member of our board of directors since December 27, 2005. During his more than 14 years of executive experience in the nursing home industry, he served as Senior Vice President of Operations and Corporate Officer of the Western Region for Mariner Post-Acute Network, a long-term care company, from November 1999 to February 2002, where he was responsible for the operation of 30 skilled nursing and assisted living centers in California. Mr. Lynch also served as Regional Vice President of Operations for the Western Region for Mariner Post-Acute Network from May 1998 to November 1999, where he controlled the operations of 20 skilled nursing and rehabilitation centers and two assisted living centers in California.

John E. King, 45, Treasurer and Chief Financial Officer.  Mr. King joined us as our Chief Financial Officer in October 2004. Mr. King has over 20 years of experience in the healthcare and financial services sectors. Mr. King served as Vice President of Finance and Chief Financial Officer for Sempercare, Inc., a private long-term acute care hospital services provider based in Plano, Texas from January 2002 until

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July 2004. From September 1999 until January 2002, Mr. King served as an independent consultant in the healthcare services field. His extensive healthcare finance background includes six years as the Senior Vice President of Finance and Chief Financial Officer of DaVita, Inc., a kidney dialysis service provider, three years as Chief Financial Officer of John F. Kennedy Memorial Hospital of the Tenet Healthcare Corporation in Palm Springs and five years at Scripps Memorial Hospital in San Diego as Controller and Internal Auditor. Mr. King was a Certified Public Accountant and began his finance career with KPMG Peat Marwick.

Roland Rapp, 45, General Counsel, Secretary and Chief Administrative Officer.  Mr. Rapp has served as our General Counsel, Secretary and Chief Administrative Officer since March 2002. He has more than 23 years of experience in the healthcare and legal sectors. From June 1993 to March 2002, Mr. Rapp was the Managing Partner of the law firm of Rapp, Kiepen and Harman, and was Chief Financial Officer for SR Management Services, Inc. from November 1995 to March 2002, both based in Pleasanton, California. His law practice centered on healthcare law and primarily focused on long-term care. Prior to practicing law, Mr. Rapp served as a nursing home administrator and director of operations for a small nursing home chain. Mr. Rapp also served as the elected Chairman of the Board for the California Association of Health Facilities (the largest State representative of nursing facility operators) from November 1999 to November 2001.

Mark Wortley, 51, Executive Vice President and President of Ancillary Subsidiaries.  Mr. Wortley has served as Executive Vice President and President of Ancillary Subsidiaries since December 27, 2005. Mr. Wortley was appointed as President of Locomotion Therapy, the predecessor to our Hallmark rehabilitation business, in September 2002. In November 2005, Mr. Wortley also was appointed President of Hospice Care of the West. An industry veteran with more than 25 years of experience, Mr. Wortley consulted with Evergreen Healthcare, Inc., a long-term care company, to develop its contract therapy program (Mosaic Rehabilitation) from January 2001 through September 2002. Prior to consulting with Evergreen, Mr. Wortley was Executive Vice President of Beverly Enterprises, Inc. from September 1994 until December 2000. At Beverly, he founded Beverly Rehabilitation (now Aegis Therapies, one of the largest contract therapy providers in the nation). Mr. Wortley also developed Matrix Rehabilitation, a chain of 200 freestanding outpatient rehabilitation clinics, and managed more than 30 hospice programs.

Peter A. Reynolds, 48, Senior Vice President, Finance and Chief Accounting Officer.  Mr. Reynolds has served as Senior Vice President, Finance and Chief Accounting Officer since April 2006. He has over 22 years of experience in the healthcare industry. From 2002 to 2006, Mr. Reynolds was Senior Vice President and Corporate Controller for PacifiCare Health Systems, Inc., a $15 billion in revenue publicly-traded managed care company, and was Controller for PacifiCare of California from 1997 to 2002. Mr. Reynolds is a Certified Public Accountant and spent 11 years in public accounting, primarily with Ernst & Young.

Susan Whittle, 58, Senior Vice President and Chief Compliance Officer.  Ms. Whittle has served as Senior Vice President and Chief Compliance Officer since March 2006. She has over 25 years of experience in the healthcare industry. From 2005 to 2006 Ms. Whittle worked in private practice as an attorney-at-law. Her law practice centered on regulatory health law matters. From 2004 to 2005 she was employed by Mariner Healthcare, Inc., a provider of skilled nursing and long-term health care services, as a litigation consultant. Prior to her work as a litigation consultant, Ms. Whittle served as Executive Vice President, General Counsel and Secretary of Mariner Health Care from 1993 to 2003.

Robert M. Le Blanc, 40, Lead Director.  Mr. Le Blanc has served as a member of our board of directors since December 27, 2005 in connection with the consummation of the Transactions. Mr. Le Blanc has served as Managing Director of Onex Investment Corp., an affiliate of Onex Corporation, a diversified industrial corporation, since 1999. Prior to joining Onex in 1999, Mr. Le Blanc worked for the Berkshire Hathaway Corporation for seven years. From 1988 to 1992, Mr. Le Blanc held numerous positions within GE Capital, related to corporate finance and corporate strategy. Mr. Le Blanc serves as a Director of Magellan Health Services, Inc., Res-Care, Inc., Center for Diagnostic Imaging, Inc., First Berkshire Hathaway Life and Emergency Medical Services, Inc, Cypress Insurance and Connecticut Children’s Medical Center.

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Michael E. Boxer, 45, Director.  Mr. Boxer has served as a member of our board of directors since April 2006. Since September 2006, Mr. Boxer has been the Chief Financial Officer of Health Markets, Inc. From March 2005 to September 2006, Mr. Boxer was the President of The Enterprise Group, Ltd., a health care financial advisory firm. Mr. Boxer was the Executive Vice President and Chief Financial Officer of Mariner Health Care, Inc., a provider of skilled nursing and long-term health care services, from January 2003 until its sale in December 2004. From July 1998 to December 2002, Mr. Boxer served as Senior Vice President and Chief Financial Officer of Watson Pharmaceuticals, Inc., a New York Stock Exchange listed specialty pharmaceuticals company. Prior to Watson, Mr. Boxer was an investment banker at Furman Selz, LLC, a New York-based investment bank. Mr. Boxer is also on the Board of Directors of the Jack and Jill Late Stage Cancer Foundation.

John M. Miller, 54, Director.  Mr. Miller has served as a member of our board of directors since August 2, 2005. Mr. Miller has served as Vice President and Treasurer of Baylor Health Care System, a system of hospitals, primary care physician centers and other healthcare clinics in Texas, since February 2001. Prior to joining Baylor in 2001, he served as Vice President and Treasurer of Medstar Health, a network of hospitals and other healthcare services in the Baltimore, Maryland-Washington D.C. region, from January 1992 through February 2001.

Glenn S. Schafer, 56, Director.  Mr. Schafer has served as a member of our board of directors since April 2006. Mr. Schafer served as Vice Chairman of Pacific Life Insurance Company until his retirement on December 31, 2005. He was appointed Vice Chairman of Pacific Life in April 2005. Prior to being named Vice Chairman, Mr. Schafer had been President and a board member of Pacific Life since 1995. Mr. Schafer joined Pacific Life as Vice President, Corporate Finance, in 1986, was elected Senior Vice President and Chief Financial Officer in 1987, and in 1991, Executive Vice President and Chief Financial Officer. He is a member of the American Institute of Certified Public Accountants, and a Fellow of the Life Management Institute. Mr. Schafer is also on the board of directors of Scottish Re Group Limited and Beckman Coulter, Inc.

William C. Scott, 69, Director.  Mr. Scott has served as a member of our board of directors since March 1998 and served as the chairman of our board of directors from March 1998 until April 2005. Mr. Scott has held various positions with Summit Care Corporation, which we acquired in March 1998, since December 1985, including Chief Executive Officer and Chief Operating Officer. Mr. Scott served as Senior Vice President of Summit Health, Ltd., Summit’s former parent company, from December 1985 until its acquisition by OrNda Health Corp. in April 1994.

Composition of the Board of Directors

Our board of directors has responsibility for our overall corporate governance and meets regularly throughout the year. Our bylaws provide that our board of directors may fix the exact number of directors by resolution of the board of directors. Each of our directors has served as a director since the date indicated in his biography. Executive officers are elected by and serve at the direction of our board of directors. There are no family relationships between any of our directors or executive officers.

Committees of the Board of Directors

We have established the following committees:

Audit Committee

Our audit committee consists of Michael E. Boxer, John M. Miller and Robert M. Le Blanc. Michael E. Boxer serves as Chairman of the audit committee and is an “audit committee financial expert” as such term is defined in Item 401(h) of Regulation S-K. Both John M. Miller and Michael E. Boxer are

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independent as such term is defined in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, although Robert M. Le Blanc is not independent. The audit committee reviews, acts on, and reports to our board with respect to various auditing and accounting matters including the recommendation of our auditors, the scope of our annual audits, fees to be paid to the auditors, evaluating the performance of our independent auditors and our accounting practices.

Our board of directors has adopted a written charter for the audit committee, which will be available on our website upon the consummation of this offering.

Compensation Committee

Our compensation committee consists of Glenn S. Schafer, William C. Scott and Robert M. Le Blanc. Glenn S. Schafer serves as Chairman of the compensation committee. Both Glenn S. Schafer and Robert M. Le Blanc are independent as such term is defined under the rules of The New York Stock Exchange, although William C. Scott is not independent. The compensation committee provides assistance to the board of directors by designing, recommending to the board of directors for approval and valuating the compensation plans, policies and programs for us and our subsidiaries, especially those regarding executive compensation, including the compensation of our Chief Executive Officer and other officers and directors, and will assist the board of directors in producing an annual report on executive compensation for inclusion in our proxy materials in accordance with applicable rules and regulations.

Our board of directors has adopted a written charter for the compensation committee, which will be available on our website upon the consummation of this offering.

Compensation of Directors

SHG Holding pays its directors for service on its board and board committees as follows:

•  Other than Robert M. LeBlanc, each non-employee director received fully vested stock grants of five shares of SHG Holding’s preferred and five shares of SHG Holding’s common stock and receives a $20,000 annual retainer;

•  reimbursement of all out-of-pocket expenses;

•  other than Mr. LeBlanc, each non-employee director receives $1,000 for each board or separately scheduled committee meeting attended in person, or $500 if attended via teleconference; and

•  the Audit committee chair will receive an additional $10,000 annual retainer and the compensation committee chair will receive an additional $5,000 annual retainer.

Currently, the members of our board of directors and SHG Holding’s board of directors are the same and we typically hold joint board meetings. In the event we hold board meetings separate from those of SHG Holding, we will reimburse our board members for all out of pocket expenses and make similar payments for board and committee meeting attendance.

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Compensation Committee Interlocks and Insider Participation

None of our executive officers serves, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has executive officers who have served on our board of directors or compensation committee.

Executive Compensation

The following table shows the compensation for our Chief Executive Officer and the four most highly paid executive officers other than the Chief Executive Officer, each a Named Executive Officer, and together, the Named Executive Officers, for services rendered in all capacities to us for the year ended December 31, 2005. The compensation described in this table does not include medical, group life insurance or other benefits received by the Named Executive Officers that are available generally to all of our salaried employees and certain perquisites and other personal benefits received by the Named Executive Officers, which do not exceed in the aggregate the lesser of $50,000 or 10% of any such officer’s annual salary and bonus disclosed in this table.

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SUMMARY COMPENSATION TABLE

							Long-Term Compensation
							Awards
							Restricted
	Annual Compensation						Stock		All Other
			Salary		Bonus		Award(s)		Compensation
Name and Principal Position	Year		($)(1)		($)(2)		($)(3)		($)(4)
Boyd Hendrickson		2005		495,000		396,000		76,610		3,236
Chief Executive Officer
Jose Lynch		2005		394,000		288,750		62,681		3,260
President and Chief Operating Officer
John E. King		2005		325,000		3,395,831		27,858		2,581
Chief Financial Officer
Roland Rapp		2005		275,000		165,000		27,858		2,581
General Counsel, Secretary and Chief Administrative Officer
Mark Wortley		2005		259,615		1,192,669		27,858		2,581
Executive Vice President and President of Ancillary Services

(1)	The amounts shown include cash compensation earned and received by the Named Executive Officer.
(2)	The amounts shown represent bonus awards that were paid in March of the following year for services rendered during the fiscal year indicated. In addition, in April 2005, we entered into a Trigger Event Cash Bonus Agreement with each of Messrs. King and Wortley in order to compensate them similarly to the economic benefit received by other Named Executive Officers that purchased restricted stock. The trigger event cash bonus agreements entitled Messrs. King and Wortley, subject to their continued service through the closing of a trigger event (as defined therein), to receive a cash bonus, upon such closing, equal to the product of (a) our terminal equity value determined as of the trigger event, plus aggregate cash dividends paid by us prior to such trigger event, multiplied by (b) the executive’s effective presumed ownership percentage. Upon the consummation of the Transactions, Messrs. King and Wortley were entitled to receive a cash payment of $3.3 million and $1.1 million, respectively, pursuant to these agreements. Each of Messrs. King and Wortley rolled over at least one-half of the after-tax proceeds from these amounts in connection with the Transactions as an investment in SHG Holding.
(3)	On December 27, 2005, SHG Holding awarded 766.1001, 626.8091, 278.5818, 278.5818 and 278.5818 shares of its restricted common stock to Messrs. Hendrickson, Lynch, King, Rapp and Wortley, respectively, subject to related restricted stock agreements. The fair market value of each share of common stock on December 27, 2005 was determined to be $100 per share, valued in connection with the purchase price in the Transactions. Therefore, the value of each of the awards as of the grant date was $76,610, $62,681, $27,858, $27,858 and $27,858, respectively. Dividends may be paid on these shares of restricted stock. The restricted stock vests 25% on the date of grant and 25% upon each anniversary of the date of grant. As of December 31, 2005, the value of the aggregate unvested shares of Messrs. Hendrickson, Lynch, King, Rapp and Wortley were $57,458, $47,011, $20,894, $20,894 and $20,894, respectively, based on the fair market value of a share of SHG Holding’s common stock at December 31, 2005 of $100.
(4)	Represents the premium paid on behalf of the executives under the standard executive insurance plan. This plan includes life, accidental death & dismemberment, long-term disability and short-term disability insurance.

Option/SAR Grants and Exercises in Last Fiscal Year

During the year ended December 31, 2005, no stock options were granted to the Named Executive Officers and none of the Named Executive Officers exercised stock options. In addition, none of the Named Executive Officers held any unexercised options at the end of the 2005 fiscal year.

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Existing Employment Arrangements

In connection with the closing of the Transactions, we entered into the following employment agreements with our Named Executive Officers.

Boyd Hendrickson.  The employment agreement with Mr. Hendrickson appoints him as our Chairman of the Board and Chief Executive Officer from December 27, 2005 through December 27, 2008, whereupon the agreement is automatically extended for successive one-year periods until written notice of non-extension is given by either us or Mr. Hendrickson no later than 60 days prior to the expiration of the then applicable term. Under the agreement, Mr. Hendrickson is entitled to receive an annual base salary of $560,000. The employment agreement also provides that Mr. Hendrickson is entitled to participate in SHG Holding’s Restricted Stock Plan, under which he received 3.4375% of the number of SHG Holding’s shares of common stock outstanding on December 27, 2005 (excluding shares issued under its Restricted Stock Plan). In addition to his base salary, Mr. Hendrickson is eligible to participate in an annual performance-based bonus plan established by our board of directors. If we terminate Mr. Hendrickson’s service with us without “cause” (as defined in the agreement), Mr. Hendrickson is entitled to a lump sum in an amount equal to two times his annual base salary, a pro-rated bonus based on the number of days that have elapsed in the year and 12 months of continued medical coverage. If we notify Mr. Hendrickson of our non-extension of the agreement, Mr. Hendrickson is entitled to a pro-rated bonus based on the number of days that have elapsed in the year and a lump sum in an amount equal to his annual base salary. Mr. Hendrickson is subject to a two-year non-compete and non-solicit following the termination of his employment.

Jose Lynch.  The employment agreement with Mr. Lynch appoints him as our President and Chief Operating Officer from December 27, 2005 through December 27, 2007, whereupon the agreement is automatically extended for successive one-year periods until written notice of non-extension is given by either us or Mr. Lynch no later than 60 days prior to the expiration of the then applicable term. Under the agreement, Mr. Lynch is entitled to receive an annual base salary of $460,000. The employment agreement also provides that Mr. Lynch is entitled to participate in SHG Holding’s Restricted Stock Plan, under which he received 2.8125% of the number of shares of SHG Holding’s common stock outstanding on December 27, 2005 (excluding shares issued under its Restricted Stock Plan). In addition to his base salary, Mr. Lynch is eligible to participate in an annual performance-based bonus plan established by our board of directors. If we terminate Mr. Lynch’s service with us without “cause” (as defined in the agreement), he will be entitled to receive a sum equal to two times his annual base salary, a pro-rated bonus based on the number of days that have elapsed in the year and 12 months of continued medical coverage. If we choose to notify Mr. Lynch of our non-extension of the agreement, Mr. Lynch is entitled to a pro-rated bonus based on the number of days that have elapsed in the year and a lump sum in an amount equal to his annual base salary. Mr. Lynch is subject to a two-year non-compete and non-solicit following the termination of his employment.

John E. King.  The employment agreement with Mr. King appoints him as our Chief Financial Officer from December 27, 2005 through December 27, 2007, whereupon the agreement is automatically extended for successive one-year periods until written notice of non-extension is given by either us or Mr. King no later than 60 days prior to the expiration of the then applicable term. Under the agreement, Mr. King is entitled to receive an annual base salary of $335,000. The employment agreement also provides that Mr. King is entitled to participate in SHG Holding’s Restricted Stock Plan, under which he received 1.25% of the number of shares of SHG Holding’s common stock outstanding on December 27, 2005 (excluding shares issued under its Restricted Stock Plan). In addition to his base salary, Mr. King is eligible to participate in an annual performance-based bonus plan established by our board of directors. If we terminate Mr. King’s service with us without “cause” (as defined in the agreement), he will be entitled to receive a sum equal to one and a half times his annual base salary, a pro-rated bonus based on the number of days that have elapsed in the year and 12 months of continued medical coverage. If we choose to notify Mr. King of our non-extension of the agreement, Mr. King is entitled to a pro-rated bonus based on the number of days that have elapsed in the year and a lump sum in an amount equal to his annual base salary. Mr. King is subject to a two-year non-compete and non-solicit following the termination of his employment.

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Roland Rapp.  The employment agreement with Mr. Rapp appoints him as our General Counsel, Secretary and Chief Administrative Officer from December 27, 2005 through December 27, 2007, whereupon the agreement is automatically extended for successive one-year periods until written notice of non-extension is given by either us or Mr. Rapp no later than 60 days prior to the expiration of the then applicable term. Under the agreement, Mr. Rapp is entitled to receive an annual base salary of $335,000. The employment agreement also provides that Mr. Rapp is entitled to participate in SHG Holding’s Restricted Stock Plan, under which he received 1.25% of the number of shares of SHG Holding’s common stock outstanding on December 27, 2005 (excluding shares issued under its Restricted Stock Plan). In addition to his base salary, Mr. Rapp is eligible to participate in an annual performance-based bonus plan established by our board of directors. If we terminate Mr. Rapp’s service with us without “cause” (as defined in the agreement), he will be entitled to receive a sum equal to one and a half times his annual base salary, a pro-rated bonus based on the number of days that have elapsed in the year and 12 months of continued medical coverage. If we choose to notify Mr. Rapp of our non-extension of the agreement, Mr. Rapp is entitled to a pro-rated bonus based on the number of days that have elapsed in the year and a lump sum in an amount equal to his annual base salary. Mr. Rapp is subject to a two-year non-compete and non-solicit following the termination of his employment.

Mark Wortley.  The employment agreement with Mr. Wortley appoints him as Executive Vice President and President of Ancillary Subsidiaries from December 27, 2005 through December 27, 2007, whereupon the agreement is automatically extended for successive one-year periods until written notice of non-extension is given by either us or Mr. Wortley no later than 60 days prior to the expiration of the then applicable term. Under the agreement, Mr. Wortley is entitled to receive an annual base salary of $335,000. The employment agreement also provides that Mr. Wortley is entitled to participate in SHG Holding’s Restricted Stock Plan, under which he received 1.25% of the number of shares of SHG Holding’s common stock outstanding on December 27, 2005 (excluding shares issued under its Restricted Stock Plan). In addition to his base salary, Mr. Wortley is eligible to participate in an annual performance-based bonus plan established by our board of directors. If we terminate Mr. Wortley’s service with us without “cause” (as defined in the agreement), he will be entitled to receive a sum equal to one and a half times his annual base salary, a pro-rated bonus based on the number of days that have elapsed in the year and 12 months of continued medical coverage. If we choose to notify Mr. Wortley of our non-extension of the agreement, Mr. Wortley is entitled to a pro-rated bonus based on the number of days that have elapsed in the year and a lump sum in an amount equal to his annual base salary. Mr. Wortley is subject to a two-year non-compete and non-solicit following the termination of his employment.

SHG Holding Solutions Restricted Stock Plan

In December 2005, SHG Holding’s board of directors adopted a restricted stock plan with respect to its common stock, or the Restricted Stock Plan. The aggregate number of shares of SHG Holding’s common stock available for issuance under the Restricted Stock Plan is 2,786 shares. The Restricted Stock Plan provides for awards of restricted stock to SHG Holding’s and its subsidiaries’ officers and other key employees. Such grants of restricted stock are required to be evidenced by restricted stock agreements and are subject to the vesting and other requirements as determined at the time of grant by a committee appointed by SHG Holding’s board of directors. To date, restricted shares granted under the Restricted Stock Plan vest (i) 25% on the date of grant and (ii) 25% on each of the first three anniversaries of the date of grant, unless the recipient ceases or has ceased to be an employee of or consultant of SHG Holding or any of its subsidiaries on the relevant anniversary date. In addition, all restricted shares will vest in the event that a third party acquires (i) enough of SHG Holding’s capital stock to elect a majority of its board of directors or (ii) all or substantially all of the assets of SHG Holding and its subsidiaries. As of June 30, 2006, SHG Holding had granted 2,612 shares of restricted stock under the Restricted Stock Plan.

Restricted Stock Issuances Prior to the Transactions

Effective March 8, 2004, we entered into restricted stock agreements with four executive officers, Messrs. Hendrickson, Lynch, Rapp and our former Chief Financial Officer. We entered into the restricted stock agreement for each executive in connection with the execution of the employment agreement with

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each executive. Pursuant to the employment agreements and subject to the restricted stock agreements, we sold 39,439, 19,719 and 6,573 shares of our restricted non-voting class B common stock to Messrs. Hendrickson, Lynch and Rapp, respectively, for $0.05 per share, subject to related restricted stock purchase agreements. The fair market value of each share of our class B common stock on March 8, 2004 was determined by our board of directors to be $0.05 per share, resulting in no value of the award as of the grant date.

The shares were subject to vesting upon certain terminations of service and certain liquidity events. Upon the consummation of the Transactions, all such shares of restricted non-voting class B common stock vested in full and converted on a one for one basis into shares of class A common stock and were valued in the Transactions at $7.3 million, $3.7 million and $1.2 million for Messrs. Hendrickson, Lynch and Rapp, respectively. Each executive rolled over at least one-half of the after-tax proceeds from these amounts as an investment in us. As of December 31, 2004, the unvested restricted shares of Messrs. Hendrickson, Lynch and Rapp had a value of $1.4 million, $0.7 million and $0.1 million, respectively, based on the then fair market value of a share of class B common stock of $35.40, less the $0.05 purchase price per share paid.

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PRINCIPAL STOCKHOLDERS

We are a direct, wholly-owned subsidiary of SHG Holding. Approximately 95% of the outstanding equity interests (which includes common and preferred stock) of SHG Holding are held by Onex. As a managing director of Onex, Robert M. Le Blanc is deemed to beneficially own shares owned by Onex. Mr. Le Blanc disclaims beneficial ownership of any such shares in which he does not have a pecuniary interest.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Agreement with Onex

Upon completion of the Transactions, SHG Holding entered into an agreement with Onex Partners Manager LP, or Onex Manager, a wholly-owned subsidiary of Onex Corporation. In exchange for providing SHG Holding with corporate finance and strategic planning consulting services, they pay Onex Manager an annual fee of $0.5 million. SHG Holding will reimburse Onex Manager for out-of-pocket expenses incurred in connection with the provision of services pursuant to the agreement, and reimbursed Onex for out-of-pocket expenses incurred in connection with the Transactions.

Leased Facilities

Our former chief executive officer (who was also a member of our board of directors during 2005) and his wife (who is also our former executive vice president and chief operating officer) own the real estate for four of our leased facilities. This real estate has not been included in the financial statements for any of the years presented in this prospectus herein. Lease payments to these parties under operating leases for these facilities for 2005, 2004 and 2003 were $2.8 million, $2.8 million and $1.9 million, respectively.

Medical Supply Company

Our former executive vice president and chief operating officer, who is also the wife of our former chief executive officer, owned approximately 33% of Twin Med Inc., a medical supply company that provides medical supplies and equipment to us pursuant to a supply contract. In May 2003, this ownership interest was fully divested. As part of our on-going effort to review and renegotiate all of our material executory contracts during our reorganization proceeding, the agreement was amended, first in September 2002 and subsequently in April 2003. The agreement, as amended, provides for an approximately 5.0% price reduction on medical supplies and equipment, effective through April 30, 2008. Billings for medical supplies from this related company for 2003 and 2002 were $5.5 million and $4.5 million, respectively. We believe that the terms of this supply agreement are at least as favorable to us as could be obtained from a third-party in an arms-length transaction.

Notes Receivable

We had a limited recourse promissory note receivable from William Scott, a current member of our board of directors, in the principal amount of approximately $2.5 million with an interest rate of 5.7%. The note was issued in April 1998 and was due on the earlier of April 15, 2007 or the sale by Mr. Scott of 20,000 shares of our common stock pledged as security for the note. We had recourse for payment up to $1.0 million of the principal amount of the note. We forgave this note upon the closing of the Transactions.

Agreement with Executive Search Solutions

On May 1, 2005, we entered into an employee placement agreement with Executive Search Solutions, LLC, a provider of recruiting services to the healthcare services industry, under which we pay Executive Search Solutions $12,085 a month to provide it with qualified candidates based on our specified criteria for positions including director of nursing, business office manager and nursing home administrator and overhead positions at a director level or above. We also pay Executive Search Solutions a per hire fee of $500 and $1,500 for each licensed nurse, and each nursing department head, respectively, that we hire as a result of Executive Search Solutions’ services. In addition, Hallmark will pay $2,750, $3,400 and $6,000 to Executive Search Solutions for each assistant, therapist and regional office director, respectively, that Hallmark hires as a result of Executive Search Solutions’ services. The term of the agreement began on May 1, 2005 and ends on April 30, 2007. We may terminate the agreement if Executive Search Solutions fails to perform under the agreement and fails to rectify its performance within 90 days after written notice. Our Chief Executive Officer, Boyd Hendrickson, and our President, Jose Lynch, each hold a beneficial ownership interest of 30.0% of Executive Search Solutions. Through December 31, 2005, we paid Executive Search Solutions $82,000.

Employment Agreements

We have employment agreements and restricted stock agreements with each of our Named Executive Officers. See “Executive Compensation — Existing Employment Arrangements” and “Executive Compensation — SHG Holding Solutions Restricted Stock Plan.”

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DESCRIPTION OF CREDIT FACILITY

Senior Secured Credit Facility

In connection with the Transactions, we entered into a second amended and restated first lien senior secured credit facility with a syndicate of financial institutions led by Credit Suisse, Cayman Islands Branch as administrative agent and collateral agent. The first lien senior secured credit facility provides for up to $334.4 million of financing, consisting of a $259.4 million term loan with a maturity of June 15, 2012 and a $75.0 million revolving credit facility with a maturity of June 15, 2010. The revolving credit facility also includes a subfacility for letters of credit and a swing line subfacility. The full amount of the loans outstanding under the subfacilities are due on the maturity date for the revolving credit facility.

Amounts borrowed under the term loan are due in quarterly installments of $650,000, with the remaining principal amount due on the maturity date for the term loan.

We have letters of credit outstanding in the approximate amount of $4.2 million, which count as borrowings under our revolver, but we have not drawn any additional amounts under the revolving credit facility.

Interest Rates and Fees

The loans under the first lien credit facility bear interest on the outstanding unpaid principal amount at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (i) the prime rate announced by Credit Suisse and (ii) the federal funds rate plus one-half of 1.0% or (b) a reserve adjusted Eurodollar rate. The applicable margin for term loans is 1.75% for base rate loans and 2.75% for Eurodollar rate loans, and the applicable margin for revolving loans will range from 1.00% to 1.75% for base rate loans and 2.00% to 2.75% for Eurodollar loans, in each case based on our consolidated leverage ratio. Loans under the swing line subfacility bear interest at the rate applicable to base rate loans under the revolving credit facility.

We are also obligated to pay commitment fees, depending on our consolidated leverage ratio, of from 0.375% to 0.50% per annum, on the unused portion of the revolving credit facility. For purposes of this calculation, swing line loans are not treated as usage of the revolving credit facility.

Prepayments

Subject to certain exceptions, loans under the first lien secured credit facility are required to be prepaid with:

•  100% of net proceeds from any asset sale by us or our subsidiaries not reinvested in productive assets within 270 days;

•  100% of the net proceeds from any insurance or condemnation award received by us or our subsidiaries not reinvested in productive assets within 270 days;

•  50% (reduced to 25% if our consolidated leverage ratio is less than 3.00 to 1.00) of the net proceeds resulting from SHG Holding’s, our or our subsidiaries’ issuance of any equity interests, or from any capital contribution to SHG Holding or us by any holder of SHG Holding’s or our equity interests, excluding proceeds from:

•  stock option or other management compensation plans for officers, directors and employees;

•  issuances of equity to us or our subsidiaries;

•  certain other limited offerings;

•  100% of the net proceeds from the issuance of certain indebtedness by SHG Holding, us or our subsidiaries, excluding indebtedness permitted to be incurred under the first lien secured credit facility; and

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•  50.0% (reduced to 25.0% if the consolidated leverage ratio is less than 3.00 to 1.00) of excess cash flow for any year, commencing in 2006.

Security and Guarantees

Our obligations under the first lien senior credit facilities are guaranteed by each of our direct and indirect wholly-owned domestic subsidiaries, excluding our captive insurance subsidiary. All obligations under the first lien senior credit facilities and the related guarantees are secured by a perfected first priority lien or security interest in substantially all of our and our direct and indirect wholly-owned subsidiaries’, excluding our captive insurance subsidiary’s, tangible and intangible assets, including intellectual property, real property and all of the capital stock or other equity interests of each of our direct and indirect wholly-owned domestic subsidiaries, excluding our captive insurance subsidiary. Additionally, SHG Holding has provided security, under a security agreement, of substantially all its assets and a pledge of its equity interest in us.

Covenants

The first lien secured credit facility contains customary affirmative and negative covenants, including limitations on indebtedness; limitations on liens and negative pledges; limitations on investments, loans, advances and acquisitions; limitations on guarantees and other contingent obligations; limitations on dividends and other payments in respect of capital stock and payments or repayments of subordinated debt; limitations on mergers, consolidations, liquidations and dissolutions; limitations on sales of assets; limitations on transactions with stockholders and affiliates; limitations on sale and leaseback transactions; limitations on changes in lines of business; and limitations on optional payments and modifications of subordinated and other debt instruments. In addition, the credit agreement contains financial covenants, including with respect to minimum interest coverage ratio, maximum leverage ratio and maximum capital expenditures.

Events of Default

Events of default under the first lien secured credit facility include, among others, nonpayment of principal when due; nonpayment of interest, fees or other amounts; cross-defaults; covenant defaults; material inaccuracy of representations and warranties; bankruptcy events with respect to us, or any of our material subsidiaries; material unsatisfied or unstayed judgments; order of dissolution of us, or any of our material subsidiaries; certain ERISA events; a change of control; actual or asserted invalidity of any guarantee or security document or security interest; or failure to maintain material health care authorizations.

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THE TRANSACTIONS

On October 22, 2005, we entered into an agreement and plan of merger with SHG Holding and SHG Acquisition Corp., entities formed by our Sponsors for purposes of acquiring us. On December 27, 2005, pursuant to the merger agreement, SHG Acquisition Corp. merged with and into us. The aggregate merger consideration was equal to $645.7 million, subject to further closing and post-closing adjustments.

We were the surviving corporation in the merger and became a wholly-owned subsidiary of SHG Holding. As the surviving corporation in the merger, we assumed by operation of law all of the obligations of SHG Acquisition Corp., including its obligations under the notes offered hereby and the related indenture.

Certain members of our senior management team and Baylor Health Care System, which we refer to collectively as the rollover investors, agreed to roll over amounts that they would otherwise receive in the merger as an investment in the equity of SHG Holding. Members of our senior management team agreed to roll over at least one-half of the after tax amount they would otherwise receive in the merger and Baylor agreed to roll over approximately $3.8 million of its equity interest in us. For purposes of the rollover investments, shares of our common stock were valued at the same per share price as would have been payable for such shares in the merger. Immediately after the merger, our Sponsors and the rollover investors held approximately 95% and 5%, respectively, of the outstanding capital stock of SHG Holding, not including restricted stock issued to management at the time of the Transactions.

Concurrently with the consummation of the transactions contemplated by the merger agreement:

•  our Sponsors made an equity investment in SHG Holding of approximately $211.3 million in cash;

•  the rollover investors made an equity investment in SHG Holding of approximately $1.5 million in cash through settlement of a bonus payable and $10.1 million in rollover equity;

•  we assumed SHG Acquisition Corp.’s $200 million aggregate principal amount of the notes offered hereby;

•  we paid cash merger consideration of $240.8 million to our existing stockholders (other than, to the extent of their rollover investment, the rollover investors) and option holders;

•  we amended our existing first lien senior secured credit facility to provide for a rollover of our then existing $259.4 million term loan and an increase in our revolving credit facility from $50 million to $75 million;

•  we repaid in full our $110 million second lien senior secured credit facility;

•  we paid accrued interest on our second lien senior secured credit facility;

•  we increased the cash on our balance sheet by $35.2 million; and

•  we paid approximately $19.2 million of fees and expenses, including placement and other financing fees, and other transaction costs and professional expenses.

We refer to the transactions contemplated by the merger agreement, along with the equity contributions, the financings and use of proceeds and other transactions listed above, collectively, as the “Transactions.”

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Ownership and Corporate Structure

As set forth in the diagram below, all of our issued and outstanding capital securities is held directly by SHG Holding, and all the issued and outstanding capital stock of SHG Holding is held by our Sponsors and the rollover investors.

(1)	Immediately following the Transactions, our Sponsor, its affiliates and its associates owned 95% of the equity interests of SHG Holding and the rollover investors owned the remaining equity interests, not including shares of SHG Holding restricted common stock issued to our management at and after the Transactions.
(2)	Each of our domestic subsidiaries will guarantee the exchange notes offered hereby, as well as our obligations under our amended senior secured credit facility. Our pharmacy joint venture in Texas and our overseas insurance subsidiary will not be guarantors.

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DESCRIPTION OF EXCHANGE NOTES

General

The private notes are governed by and the exchange notes will be governed by an indenture among SHG Acquisition Corp., Skilled Healthcare Group, Inc., certain of Skilled Healthcare Group, Inc.’s subsidiaries, and Wells Fargo Bank National Association, as trustee. Skilled Healthcare Group, Inc. assumed all of the obligations under the indenture and the private notes from SHG Acquisition Corp. in connection with the Transactions. The terms of the notes include those expressly set forth in the indenture and those made part of the indenture by reference to the Trust Indenture Act.

Certain terms used in this description are defined under the subheading “— Certain Definitions.” In this description, the word “Company” and references to “we,” “our,” and “us” refer to Skilled Healthcare Group, Inc. and not to any of its subsidiaries. As used in this section, the terms “note” and “notes” refer to the exchange notes.

The following description is only a summary of the material provisions of the Indenture. The exchange notes are identical in all material respects to the terms of the private notes, except that the registration rights and related additional interest provisions, and the transfer restrictions that apply to the private notes, do not apply to the exchange notes. We urge you to read the Indenture because it, not this description, defines your rights as holders of the exchange notes.

The Exchange Notes:

•  will be unsecured senior subordinated obligations of the Company;

•  will be subordinated in right of payment to all existing and future Senior Indebtedness of the Company;

•  will be senior in right of payment to any future Subordinated Obligations of the Company; and

•  will be guaranteed by each Subsidiary Guarantor.

Each Guarantee of the exchange notes:

•  will be an unsecured, senior subordinated obligation of such guarantor;

•  will be subordinated in right of payment to all existing and future senior indebtedness of such guarantor; and

•  will be senior in right of payment to any future subordinated obligations.

Principal, Maturity and Interest

The Company will issue the notes initially with a maximum aggregate principal amount of $200 million. The Company will issue the notes in denominations of $2,000 and any greater integral multiple of $1,000. The notes will mature on January 15, 2014. Subject to our compliance with the covenant described under the subheading “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”, we are permitted to issue more notes from time to time under the Indenture (the “Additional Notes”). The notes and the Additional Notes, if any, will be treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of Exchange Notes”, references to the notes include any Additional Notes actually issued.

Interest on the notes will accrue at the rate of 11% per annum and will be payable semiannually in arrears on January 15 and July 15, commencing on July  15, 2006. We will make each interest payment to the Holders of record of these notes on the immediately preceding January 1 and July 1.

Interest on the notes will accrue from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

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Optional Redemption

Except as set forth below, we will not be entitled to redeem the notes at our option prior to January 15, 2010.

On and after January 15, 2010, we will be entitled at our option to redeem all or a portion of these notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on January 15 of the years set forth below:

	Redemption
Period	Price
2010		105.50%
2011		102.75%
2012 and thereafter		100.00%

Prior to January 15, 2009, we will be entitled at our option on one or more occasions to redeem notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the notes (which includes Additional Notes, if any) issued at a redemption price (expressed as a percentage of principal amount) of 111.00%, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from one or more Public Equity Offerings; provided, however, that:

(1) at least 65% of such aggregate principal amount of notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than notes held, directly or indirectly, by the Company or its Affiliates); and

(2) each such redemption occurs within 90 days after the date of the related Public Equity Offering.

Prior to January 15, 2010, we will be entitled at our option to redeem all, but not less than all, of the notes at a redemption price equal to 100% of the principal amount of the notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). Notice of such redemption must be mailed by first-class mail to each Holder’s registered address, not less than 30 nor more than 60 days prior to the redemption date.

“Applicable Premium” means with respect to a Note at any redemption date, the greater of (1) 1.00% of the principal amount of such Note and (2) the excess of (A) the present value at such redemption date of (i) the redemption price of such Note on January 15, 2010 (such redemption price being described in the second paragraph in this “— Optional Redemption” section exclusive of any accrued interest) plus (ii) all required remaining scheduled interest payments due on such Note through January 15, 2010 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such redemption date.

“Adjusted Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities”, for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after January 15, 2010, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation

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date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, in each case, plus 0.50%.

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the notes from the redemption date to January 15, 2010, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to January 15, 2010.

“Comparable Treasury Price” means, with respect to any redemption date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.

“Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

“Reference Treasury Dealer” means Credit Suisse First Boston LLC and its successors and assigns, JPMorgan Securities Inc. and its successors and assigns and one other nationally recognized investment banking firm selected by the Company that is a primary U.S. Government securities dealers.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

Selection and Notice of Redemption

If we are redeeming less than all the notes at any time, the Trustee will select notes on a pro rata basis to the extent practicable.

We will redeem notes of $2,000 or less in whole and not in part. We will cause notices of redemption to be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. We will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note. notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

We are not required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain circumstances, we may be required to offer to purchase notes as described under the captions “— Change of Control” and “— Certain Covenants — Asset Sales.” We may at any time and from time to time purchase notes in the open market or otherwise.

Guaranties

The Subsidiary Guarantors will jointly and severally guarantee, on a senior subordinated basis, our obligations under these notes. The obligations of each Subsidiary Guarantor under its Subsidiary Guaranty will be limited as necessary to prevent that Subsidiary Guaranty from constituting a fraudulent conveyance under applicable law. See “Risk Factors — Federal and State statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from our subsidiary guarantors.”

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Each Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty will be entitled upon payment in full of all guarantied obligations under the Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

Pursuant to the Indenture, (A) a Subsidiary Guarantor may consolidate with, merge with or into, or transfer all or substantially all its assets to any other Person to the extent described below under “— Certain Covenants — Merger, Consolidation or Sale of Assets” and (B) the Capital Stock of a Subsidiary Guarantor may be sold or otherwise disposed of to another Person to the extent described below under “— Certain Covenants — Asset Sales”; provided, however, that, in the case of a consolidation, merger or transfer of all or substantially all the assets of such Subsidiary Guarantor, if such other Person is not the Company, or a Subsidiary Guarantor, such Subsidiary Guarantor’s obligations under its Subsidiary Guaranty must be expressly assumed by such other Person, except that such assumption will not be required in the case of:

(1) the sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor, including the sale or disposition of Capital Stock of a Subsidiary Guarantor following which such Subsidiary Guarantor is no longer a Subsidiary; or

(2) the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor;

in each case other than to the Company or a Subsidiary of the Company and as permitted by the Indenture and if in connection therewith the Company provides an Officers’ Certificate to the Trustee to the effect that the Company will comply with its obligations described below under “— Certain Covenants — Asset Sales” in respect of such disposition. Upon any sale or disposition described in clause (1) or (2) above, the obligor on the related Subsidiary Guaranty will be released from its obligations thereunder.

The Subsidiary Guaranty of a Subsidiary Guarantor also will be released:

(1) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary;

(2) at such time as such Subsidiary Guarantor does not have any Indebtedness outstanding that would have required such Subsidiary Guarantor to enter into a Guaranty Agreement pursuant to the covenant described under “— Certain Covenants — Future Guaranties”; or

(3) if we exercise our legal defeasance option or our covenant defeasance option as described under “— Defeasance” or if our obligations under the Indenture are discharged as provided for under “— Satisfaction and Discharge” or otherwise in accordance with the terms of the Indenture.

Ranking

Senior Indebtedness versus Notes

The payment of the principal of, premium, if any, and interest on the notes and the payment of the any Subsidiary Guaranty will be subordinate in right of payment to the prior payment in full of all Senior Indebtedness of the Company or the relevant Subsidiary Guarantor, as the case may be, including the obligations of the Company and such Subsidiary Guarantor under the Senior Credit Facilities.

As of June 30, 2006:

(1) the Company’s Senior Indebtedness was approximately $257.4 million, all of which is secured; and

(2) the Senior Indebtedness of the Subsidiary Guarantors was approximately $257.4 million, all of which is secured. Virtually all of the Senior Indebtedness of the Subsidiary Guarantors consists of their respective guaranties of Senior Indebtedness of the Company under the Senior Credit Facilities.

Although the Indenture contains limitations on the amount of additional Indebtedness that the Company and the Subsidiary Guarantors may incur, under certain circumstances the amount of such

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Indebtedness could be substantial and, in any case, such Indebtedness may be Senior Indebtedness. See “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock.”

Liabilities of Subsidiaries versus Notes

All of our operations are conducted through our subsidiaries. Our off-shore captive insurance subsidiary and our 50% owned pharmacy joint venture are not guaranteeing the notes, and, as described above under “— Guaranties”, Subsidiary Guaranties may be released under certain circumstances. In addition, our future subsidiaries may not be required to guarantee the notes. Claims of creditors of any non-guarantor subsidiaries and joint ventures, including trade creditors and creditors holding indebtedness or guarantees issued by such non-guarantor subsidiaries and joint ventures, and claims of preferred stockholders of such non-guarantor subsidiaries and joint ventures generally will have priority with respect to the assets and earnings of such non-guarantor subsidiaries and joint ventures over the claims of creditors of the Company, including Holders, even if such claims do not constitute Senior Indebtedness. Accordingly, the notes will be effectively subordinated to creditors (including trade creditors) and preferred stockholders, if any, of such non-guarantor subsidiaries and joint ventures.

Our non-guarantor subsidiary and pharmacy joint venture had aggregate consolidated liabilities, excluding liabilities owing to the Company or any Subsidiary Guarantor, as of June 30, 2006, of $6.5 million. Although the Indenture limits the incurrence of Indebtedness and issuance of Preferred Stock by certain of our subsidiaries, such limitation is subject to a number of significant qualifications. Moreover, the Indenture does not impose any limitation on the incurrence by such subsidiaries of liabilities that are not considered Indebtedness or Preferred Stock under the Indenture. See “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock.”

Other Senior Subordinated Indebtedness versus Notes

Only Indebtedness of the Company or a Subsidiary Guarantor that is Senior Indebtedness will rank senior to the notes and the relevant Subsidiary Guaranty in accordance with the provisions of the Indenture. The notes and each Subsidiary Guaranty will in all respects rank pari passu with all other Senior Subordinated Indebtedness of the Company and the relevant Subsidiary Guarantor, respectively.

We and the Subsidiary Guarantors have agreed in the Indenture that we and they will not incur any Indebtedness that is subordinate or junior in right of payment to our Senior Indebtedness or the Senior Indebtedness of such Subsidiary Guarantors, unless such Indebtedness is Senior Subordinated Indebtedness of the Company or the Subsidiary Guarantors, as applicable, or is expressly subordinated in right of payment to Senior Subordinated Indebtedness of the Company or the Subsidiary Guarantors, as applicable. The Indenture does not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Senior Indebtedness as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.

Payment of Notes

We are not permitted to pay principal of, premium, if any, or interest on the notes or make any deposit pursuant to the provisions described under “— Defeasance” below and may not purchase, redeem or otherwise retire any notes (collectively, “pay the notes”) (except that Holders of notes may receive and retain Permitted Junior Securities and payments made from either of the trusts described under “— Defeasance” and “— Satisfaction and Discharge”) if either of the following occurs (a “Payment Default”):

(1) any Obligation on any Designated Senior Indebtedness of the Company is not paid in full in cash when due; or

(2) any other default on Designated Senior Indebtedness of the Company occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms;

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unless, in either case, the Payment Default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash. Regardless of the foregoing, we are permitted to pay the notes if we and the Trustee receive written notice approving such payment from the Representatives of all Senior Indebtedness with respect to which the Payment Default has occurred and is continuing.

During the continuance of any default (other than a Payment Default) with respect to any Designated Senior Debt of the Company pursuant to which the maturity thereof may be accelerated without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, we are not permitted to pay the notes for a period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to us) of written notice (a “Blockage Notice”) of such default from the Representative of such Designated Senior Debt specifying an election to effect a Payment Blockage Period and ending 179 days thereafter. The Payment Blockage Period will end earlier if such Payment Blockage Period is terminated:

(1) by written notice to the Trustee and us from the Person or Persons who gave such Blockage Notice;

(2) because the default giving rise to such Blockage Notice is cured, waived or otherwise no longer continuing; or

(3) because such Designated Senior Debt has been discharged or repaid in full in cash.

Notwithstanding the provisions described in the immediately preceding paragraph, unless the holders of such Designated Senior Debt or the Representative of such Designated Senior Debt have accelerated the maturity of such Designated Senior Debt, we are permitted to resume paying the notes after the end of such Payment Blockage Period, subject however to the provisions discussed in the second preceding paragraph. The notes shall not be subject to more than one Payment Blockage Period in any consecutive 360-day period irrespective of the number of defaults with respect to Designated Senior Debt of the Company during such period.

Upon any payment or distribution of the assets of the Company upon a total or partial liquidation or dissolution or reorganization of or similar proceeding relating to the Company or its property:

(1) the holders of Senior Indebtedness of the Company will be entitled to receive payment in full in cash of such Senior Indebtedness before the Holders are entitled to receive any payment;

(2) until the Senior Indebtedness of the Company is paid in full in cash, any payment or distribution to which Holders would be entitled but for the subordination provisions of the Indenture will be made to holders of such Senior Indebtedness as their interests may appear, except that Holders may receive and retain Permitted Junior Securities and payments from either of the trusts described under “— Defeasance” and “— Satisfaction and Discharge”; and

(3) if a distribution is made to Holders that, due to the subordination provisions, should not have been made to them, such Holders are required to hold it in trust for the holders of Senior Indebtedness of the Company and pay it over to them as their interests may appear.

The subordination and payment blockage provisions described above will not prevent a Default from occurring under the Indenture upon the failure of the Company to pay interest or principal with respect to the notes when due by their terms. If payment of the notes is accelerated because of an Event of Default, the Company or the Trustee must promptly notify the holders of Designated Senior Indebtedness of the Company or the Representative of such Designated Senior Indebtedness of the acceleration. If any Designated Senior Indebtedness of the Company is outstanding, neither the Company nor any Subsidiary Guarantor may pay the notes until five Business Days after the Representatives of all the issues of such Designated Senior Indebtedness receive notice of such acceleration and, thereafter, may pay the notes only if the Indenture otherwise permits payment at that time.

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A Subsidiary Guarantor’s obligations under its Subsidiary Guaranty are senior subordinated obligations. As such, the rights of Holders to receive payment by a Subsidiary Guarantor pursuant to its Subsidiary Guaranty will be subordinated in right of payment to the rights of holders of Senior Indebtedness of such Subsidiary Guarantor. The terms of the subordination and payment blockage provisions described above with respect to the Company’s obligations under the notes apply equally to a Subsidiary Guarantor and the obligations of such Subsidiary Guarantor under its Subsidiary Guaranty.

By reason of the subordination provisions contained in the Indenture, in the event of a liquidation or insolvency proceeding, creditors of the Company or a Subsidiary Guarantor who are holders of Senior Indebtedness of the Company or a Subsidiary Guarantor, as the case may be, may recover more, ratably, than the Holders, and creditors of ours who are not holders of Senior Indebtedness may recover less, ratably, than holders of our Senior Indebtedness and may recover more, ratably, than the Holders.

The terms of the subordination provisions described above will not apply to payments from money or the proceeds of U.S. Government Obligations held in trust by the Trustee for the payment of principal of and interest on the notes pursuant to the provisions described under “— Defeasance.”

Book-Entry, Delivery and Form

Except as set forth below, the exchange notes will be issued in registered, global form in minimum denomination of $2,000 and integral multiples of $1,000 in excess of $2,000 (the “Global Notes”). The exchange notes will be issued at he closing of the exchange offer only against surrender of private notes.

The Depository Trust Company (“DTC”), New York, NY, will act as depository for the notes. The notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered note certificate will be issued for the notes, in the aggregate principal amount of such issue, and will be deposited with DTC.

DTC has advised us that DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for issues of equity, corporate and municipal debt, and money market instruments that its participants (“direct participants”) deposit with DTC. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between direct participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. Access to the DTC system is also available to others such as securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly (“indirect participants”).

Exchanges of notes under the DTC system must be made by or through direct participants, which will receive a credit for the notes on DTC’s records. The ownership interest of each actual holder of each note (“beneficial owner”) is in turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation from DTC of their exchange. Beneficial owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the notes, except in the following circumstances: (i) DTC (A) notifies us that it is unwilling or unable to continue as depositary for the Global Notes or (B) has ceased to e a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed, (ii) we, at our option, notify the Trustee in writing that we elect to cause the issuance of certificated notes, or (iii) there has occurred and is continuing a Default with respect to the

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Notes. No beneficial owner of an interest in a note will be able to transfer that interest except in accordance with DTC’s applicable procedures, in addition to those provided for under the indenture and, if applicable, those of Euroclear and Clearstream Banking.

To facilitate subsequent transfers, all notes deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of notes with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes; DTC’s records reflect only the identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial owners of notes may wish to take certain steps to augment transmission to them of notices of significant events with respect to the notes, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, beneficial owners of notes may wish to ascertain that the nominee holding the notes for their benefit has agreed to obtain and transmit notices to beneficial owners; in the alternative, beneficial owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Payments of the principal of, and interest on, a note will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit direct participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the exchange agent on the applicable payment date in accordance with their respective holdings shown on DTC’s records. Neither we, the trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

A beneficial owner shall give notice to elect to have its notes tendered, through its participant, to the exchange agent, and shall effect delivery of such notes by causing the direct participant to transfer the participant’s interest in the notes, on DTC’s records, to the exchange agent’s account. The requirement for physical delivery of notes in connection with a tender will be deemed satisfied when the ownership rights in the notes are transferred by direct participants on DTC’s records and followed by a book-entry credit of tendered notes to the exchange agent’s DTC account. If there is an Event of Default under the notes, the DTC will exchange the applicable global note for certificated notes, which it will distribute to participants.

Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream Banking will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the notes, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream Banking, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream Banking, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream Banking, as the case may be, by the counterparts in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream Banking, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant notes in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream Banking participants may not deliver instructions directly to the depositories for Euroclear or Clearstream Banking.

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Because of time zone differences, the securities account of a Euroclear or Clearstream Banking participant purchasing an interest in a global note from a participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream Banking participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream Banking) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream Banking as a result of sales of interest in a global note by or through a Euroclear or Clearstream Banking participant to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream Banking cash account only as of the business day for Euroclear or Clearstream Banking following DTC’s settlement date.

Although DTC, Euroclear and Clearstream Banking are expected to follow the foregoing procedures in order to facilitate transfers of interests in a global note among participants of DTC, Euroclear and Clearstream Banking, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream Banking or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

DTC may discontinue providing its services as securities depository with respect to the notes at any time by giving reasonable notice to us or the exchange agent. Under such circumstances, if a successor depositary is not appointed by us within 90 days, note certificates will be printed and delivered.

We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, notes certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we takes no responsibility for the accuracy thereof.

Same Day Settlement and Payment

The Company will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. The Company will make all payments of principal, interest and premium and additional interest, if any, with respect to certificated notes by wire transfer of immediately available funds to the accounts specified by the Holders of the certificated notes or, if no such account is specified, by mailing a check to each such Holder’s registered address. The notes represented by the Global Notes are expected to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any certificated notes will also be settled in immediately available funds.

Change of Control

If a Change of Control occurs, each Holder will have the right to require the Company to repurchase all or any part (equal to $2,000 or any greater amount in multiples of $1,000) of that Holder’s notes pursuant to the Change of Control Offer (as defined below). In the Change of Control Offer, the Company will offer a payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase (the “Change of Control Payment”). Within 60 days following any Change of Control, the Company will mail a notice (the “Change of Control Offer”) to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on a date (the “Change of Control Payment Date”) no earlier than 30 days and no later than 60 days from the date the notice is mailed, other than as may be required by law, pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture relating to such Change of

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Control Offer, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof.

On the Change of Control Payment Date, the Company will, to the extent lawful:

(l) accept for payment all notes or portions thereof in minimum amounts equal to $2,000 or an integral multiple of $1,000 in excess thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all notes or portions thereof so tendered; and

(3) deliver or cause to be delivered to the Trustee the notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of notes or portions thereof being purchased by the Company.

The Paying Agent will promptly mail to each Holder of notes so tendered the Change of Control Payment for such notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided, however, that each such new Note will be in a principal amount of $2,000 or any greater amount in multiples of $1,000.

If making a Change Of Control Payment would violate any outstanding Senior Indebtedness of the Company, prior to complying with any of the provisions of this “Change of Control” covenant, but in any event within 90 days following a Change of Control, the Company will either repay such Senior Indebtedness or obtain the requisite consents under the agreements governing such Senior Indebtedness to permit the repurchase of notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders to require that the Company repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

The Company’s Senior Indebtedness prohibits the Company from purchasing any notes in the event of a Change of Control, and also provides that certain change of control events with respect to the Company would constitute a default under the agreements governing the Senior Indebtedness. Any future credit agreements or other agreements relating to Senior Indebtedness to which the Company become a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing notes, the Company could seek the consent of its senior lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing notes. In such case, the Company’s failure to offer to purchase the notes or its failure to purchase tendered notes would result in an Event of Default under the Indenture, which would, in turn, constitute a default under such Senior Indebtedness. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders.

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer or if notice of redemption has been given pursuant to “Optional Redemption” above.

The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of the Company and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all”, no precise, established definition of the phrase exists under applicable law. Accordingly, the ability of a Holder to

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require the Company to repurchase notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain.

The provisions under the Indenture relative to our obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the notes.

Certain Covenants

Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiary’s Equity Interests (including any payment on such Equity Interests in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiary’s Equity Interests in their capacity as such other than dividends or distributions payable in Qualified Equity Interests and other than dividend or distributions payable to the Company or a Restricted Subsidiary;

(2) purchase, redeem or otherwise acquire or retire for value (including, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company;

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or a Subsidiary Guarantor that is contractually subordinated to the notes or the Subsidiary Guaranties, except (i) payments of interest or principal at Stated Maturity thereof, (ii) payments of interest or principal on or in respect of Indebtedness owed to and held by the Company or any Restricted Subsidiary and (iii) payments, purchases, redemptions, defeasances or other acquisitions or retirements for value in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation or mandatory redemption, in each case, due within one year of the Stated Maturity thereof; or

(4) make any Restricted Investment;

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”);

unless, at the time of and after giving effect to such Restricted Payment:

(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) the Company would, after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7), (8), (9), (10) and (11) of the next succeeding paragraph), is not greater than the sum, without duplication, of:

(a) 50% of the combined Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the fiscal quarter in which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

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(b) 100% of the aggregate net proceeds received by the Company after the Issue Date as a contribution to its common equity capital or received by the Company from the issue or sale after the Issue Date (other than to a Subsidiary of the Company) of Qualified Equity Interests or of Disqualified Stock or debt securities of the Company that have been converted into or exchanged for such Qualified Equity Interests (but excluding any such net proceeds applied to permit the incurrence of any Contribution Indebtedness); plus

(c) 100% of the net proceeds received by the Company by means of (i) the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company and its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Company and its Restricted Subsidiaries and repayments of loans or advances which constitute Restricted Investments by the Company and its Restricted Subsidiaries or (ii) the sale (other than to the Company or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary; plus

(d) if any Unrestricted Subsidiary (i) is redesignated as a Restricted Subsidiary, the fair market value of such redesignated Unrestricted Subsidiary (as certified to the Trustee in an Officers’ Certificate) as of the date of its redesignation or (ii) pays any cash dividends or cash distributions to the Company or any Restricted Subsidiary, 100% of any such dividends or distributions made after the Issue Date.

The preceding provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment would have complied with the provisions of the Indenture;

(2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale or issuance (other than to a Subsidiary of the Company) of, Qualified Equity Interests or from the substantially concurrent contribution to the common equity capital of the Company (but excluding any such net proceeds applied to permit the incurrence of any Contribution Indebtedness); provided, however, that the amount of any such net cash proceeds that are utilized for any such Restricted Payment shall be excluded from clause (3)(b) of the preceding paragraph and shall not be applied to permit the payment of any other Restricted Payment;

(3) the defeasance, redemption, repurchase, repayment or other acquisition of subordinated Indebtedness of the Company or any Restricted Subsidiaries with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

(4) the payment of any dividend (or in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary to the holders of its Equity Interests on a pro rata basis, taking into account the relative preferences, if any, of the various classes of equity interests in such Restricted Subsidiary;

(5) the repurchase, redemption or other acquisition or retirement for value (or the distribution of amounts to any other direct or indirect parent of the Company to fund any such repurchase, redemption or other acquisition or retirement) of any Equity Interests of the Company or any direct or indirect parent of the Company held by any current or former officer, director, consultant or employee of the Company or any Restricted Subsidiary (or any permitted transferees, assigns, estates or heirs of any of the foregoing); provided, however, the aggregate amount paid by the Company and its Restricted Subsidiaries pursuant to this clause (5) shall not exceed $2.5 million in any calendar year (excluding for purposes of calculating such amount the amount paid for Equity Interests repurchased, redeemed, acquired or retired with the proceeds from the repayment of outstanding loans previously made by the Company or a Restricted Subsidiary for the purpose of financing the acquisition of such Equity Interests), with unused amounts in any calendar year being carried over for one additional

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calendar year; provided further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(A) the net cash proceeds from the sale of Qualified Equity Interests of the Company and, to the extent contributed to the common equity capital of the Company, Equity Interests of any of the Company’s direct or indirect parent entities (but excluding any such net proceeds applied to permit the incurrence of any Contribution Indebtedness), in each case to members of management, directors or consultants of the Company, any of its Subsidiaries or any of its direct or indirect parent corporations that occurs after the Issue Date, to the extent such cash proceeds have not otherwise been and are not thereafter applied to permit the payment of any other Restricted Payment; plus

(B) the cash proceeds of key man life insurance policies received by the Company and its Restricted Subsidiaries after the Issue Date; less

(C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this clause (5);

provided further, however, that cancellation of Indebtedness owing to the Company from members of management of the Company, any of its direct or indirect parent corporations or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Company or any of its direct or indirect parent corporations will not be deemed to constitute a Restricted Payment for purposes of the Indenture;

(6) the declaration and payment of dividends on Disqualified Stock in accordance with the certificate of designations therefor; provided, however, that such issuance of Disqualified Stock is permitted under the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;”

(7) repurchases of Equity Interests deemed to occur upon the exercise of stock options to the extent that such Equity Interests represent a portion of the exercise price thereof;

(8) payments permitted under clauses (7), (8) and (9) under the caption “— Transactions with Affiliates;”

(9) payments made to purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Company or any Restricted Subsidiary or any Subordinated Obligation of the Company or a Subsidiary Guarantor (other than Equity Interests or subordinated Indebtedness issued to or at any time held by an Affiliate of any such Person), in each case, pursuant to provisions requiring such Person to offer to purchase, redeem, defease or otherwise acquire or retire for value such Equity Interests or subordinated Indebtedness upon the occurrence of a Change of Control or with the proceeds of Asset Sales as defined in the charter provisions, agreements or instruments governing such Equity Interests or subordinated Indebtedness; provided, however, that a Change of Control Offer or Asset Sale Offer, as applicable, has been made and the Company has purchased all notes validly tendered in connection with that Change of Control Offer or Asset Sale Offer;

(10) the declaration and payment of dividends on the Company’s common stock (or the payment of dividends to any direct or indirect parent entity to fund a payment of dividends on such entity’s common stock), following the first Public Equity Offering of the Company’s common stock or the common stock of any of its direct or indirect parent entities after the Issue Date, of up to 6% per annum of the net cash proceeds received by the Company therefrom and, in the case of an offering of such parent entity, contributed to the Company’s common equity capital; and

(11) other Restricted Payments in an aggregate amount up to $15.0 million;

provided, however, that, in the case of clause (9), no Default shall have occurred and be continuing or would occur as a consequence of the making of the Restricted Payment contemplated thereby.

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The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the assets or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.

Incurrence of Indebtedness and Issuance of Preferred Stock

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt) and the Company will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Company or any of the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and any of the Subsidiary Guarantors may issue Preferred Stock if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.

The first paragraph of this covenant will not prohibit the incurrence of any or the following items of Indebtedness (collectively, “Permitted Debt”):

(1) the incurrence by the Company or any Restricted Subsidiary of Indebtedness and reimbursement obligations in respect of letters of credit pursuant to the Senior Credit Facilities; provided, however, that the aggregate amount of all Indebtedness then classified as having been incurred in reliance upon this clause (1) that remains outstanding under the Senior Credit Facilities after giving effect to such incurrence does not exceed $335 million, less, to the extent a permanent repayment and/or commitment reduction is required thereunder as a result of such application, the aggregate amount of Net Proceeds applied to repayments under the Senior Credit Facilities in accordance with the covenant described under “— Asset Sales”;

(2) the incurrence by the Company or any Restricted Subsidiary of Existing Indebtedness;

(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the notes originally issued on the Issue Date and the related Subsidiary Guaranties, and the Exchange Notes and related Subsidiary Guaranties to be issued pursuant to the Registration Rights Agreement in respect thereof;

(4) the incurrence by the Company or any Restricted Subsidiary of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used or useful in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount or accreted value, as applicable, not to exceed at any time outstanding the greater of $15.0 million and 2.0% of Total Assets at the time of any incurrence under this clause (4);

(5) the incurrence by the Company or any Restricted Subsidiary of Indebtedness or Preferred Stock in connection with the acquisition of assets or a new Restricted Subsidiary and Permitted Refinancing Indebtedness in respect thereof; provided, however, that such Indebtedness or Preferred Stock (other than such Permitted Refinancing Indebtedness) was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or a Subsidiary of the Company; provided further, however, that the principal amount (or accreted value, as applicable) of such Indebtedness or Preferred Stock, together with any other outstanding Indebtedness and Preferred Stock incurred pursuant to this clause (5), does not exceed $25.0 million;

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(6) Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, asset or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, however, that (a) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)) and (b) the maximum assumable liability in respect of such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any such subsequent changes in value) actually received by the Company or such Restricted Subsidiary in connection with such disposition;

(7) the incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance, defease or discharge Indebtedness incurred pursuant to the first paragraph of this “— Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, clause (2) or (3) above, this clause (7) or clause (13) or (16) below;

(8) the incurrence by the Company or any Restricted Subsidiary of intercompany Indebtedness between the Company and any Restricted Subsidiary; provided, however, that:

(a) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the notes, in the case of the Company, or the Subsidiary Guaranty of such Subsidiary Guarantor, in the case of a Subsidiary Guarantor; and

(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (8);

(9) the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations incurred in the ordinary course of business with a bona fide intention to limited interest rate risk or exchange rate risk;

(10) the guarantee by the Company or a Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;

(11) the issuance by a Restricted Subsidiary to the Company or any Restricted Subsidiary of Preferred Stock; provided, however, that (a) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary and (b) any sale or other transfer of any such Preferred Stock to a Person that is neither the Company nor a Restricted Subsidiary shall be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that is not permitted by this clause (11);

(12) the incurrence by the Company or any Restricted Subsidiary in respect of workers’ compensation claims, self-insurance obligations, indemnities, bankers’ acceptances, performance, completion and surety bonds or guarantees, and similar types of obligations in the ordinary course of business;

(13) the incurrence by the Company or any Subsidiary Guarantor of Indebtedness or Preferred Stock in connection with the acquisition of assets or a Person; provided, however, that, after giving

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effect to such acquisition, the Company could incur an additional dollar of Indebtedness pursuant to the first paragraph of this covenant or the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;

(14) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;

(15) the incurrence by a Restricted Subsidiary that is a bona fide joint venture between the Company and a third party, where the third party is not a Subsidiary of the Company and owns at least 20% of the economic interest of the Restricted Subsidiary, of Indebtedness or Preferred Stock; provided, however, that the principal amount (or accreted value, as applicable) of such Indebtedness or Preferred Stock, together with any other outstanding Indebtedness or Preferred Stock incurred pursuant to this clause (15), does not exceed $30.0 million;

(16) the incurrence of Indebtedness of the Company and Indebtedness or Preferred Stock of any Subsidiary Guarantor equal to 100% of the net cash proceeds received by the Company after the Issue Date from the sale of Qualified Equity Interests of the Company or, to the extent contributed to the common equity capital of the Company, Equity Interests of any of the Company’s direct or indirect parent entities (in each case, other than proceeds of sales of Equity Interests to any Subsidiary of the Company) to the extent such net cash proceeds have not otherwise been and are not thereafter applied to permit the payment of any Restricted Payment; and

(17) the incurrence by the Company or any Subsidiary Guarantor of additional Indebtedness, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $25.0 million.

For purposes of determining compliance with this “— Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness in any manner that complies with this covenant (except that Indebtedness incurred under the Senior Credit Facilities on the Issue Date shall be deemed to have been incurred pursuant to clause (1) above). In addition, the Company may, at any time, change the classification of an item of Indebtedness or any portion thereof (except for Indebtedness incurred under clause (1) above) to any other clause or to the first paragraph hereof; provided, however, that the Company would be permitted to incur such item of Indebtedness (or portion thereof) pursuant to such other clause or the first paragraph hereof, as the case may be, at such time of reclassification. The accrual of interest, the accrual of dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

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Liens

The Company will not, and will not permit any Restricted Subsidiary to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) securing Indebtedness upon any of their property or assets, now owned or hereafter acquired unless:

(1) in the case of Liens securing Indebtedness that is expressly subordinated or junior in right of payment to the notes, the notes are secured on a senior basis to the obligations so secured until such time as such obligations are no longer secured by a Lien; and

(2) in all other cases, the notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

Dividend and Other Payment Restrictions

The Company will not, and will not permit its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1) pay dividends or make any other distributions to the Company or any Restricted Subsidiary (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits;

(2) pay any Indebtedness owed to the Company or any Restricted Subsidiary;

(3) make loans or advances to the Company or any Restricted Subsidiary; or

(4) transfer any of its properties or assets to the Company or any Restricted Subsidiary.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1) Existing Indebtedness and the Senior Credit Facilities as in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings, of any thereof; provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not, taken as a whole, materially more restrictive with respect to such dividend and other payment restrictions than those contained in those agreements as in effect on the Issue Date;

(2) the Indenture, the notes, the Subsidiary Guaranties, the Exchange Notes or the Registration Rights Agreement;

(3) any applicable law, rule, regulation or order;

(4) any instrument or agreement of a Person acquired by the Company or any Restricted Subsidiary as in effect at the time of such acquisition (except to the extent incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided, however, that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

(5) customary non-assignment provisions in contracts and licenses entered into in the ordinary course of business;

(6) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property so acquired or leased of the nature described in clause (4) of the preceding paragraph;

(7) secured Indebtedness otherwise permitted under the Indenture, the terms of which limit the right of the debtor to dispose of the assets securing such Indebtedness;

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(8) Permitted Refinancing Indebtedness; provided, however, that the material restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not, taken as a whole, materially more restrictive with respect to such dividend and other payment restrictions than those contained in the agreements governing the Indebtedness being Refinanced;

(9) any agreement for the sale or other disposition of a Restricted Subsidiary or an asset that restricts distributions by such Restricted Subsidiary or transfers of such asset pending the sale or other disposition;

(10) Liens permitted to be incurred under the provisions of the covenant described above under the caption “— Liens” that limit the right of the debtor to dispose of the assets subject to such Liens;

(11) provisions limiting the disposition, dividend or distribution of assets or property in joint venture agreements, partnership agreements, limited liability company operating agreements, asset sale agreements, sale-leaseback agreements, stock or equity sale agreements and other similar agreements, which limitation is applicable only to the assets or property that are the subject of such agreements; and

(12) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

Asset Sales

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1) the Company (or such Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; and

(2) at least 75% of the consideration received therefor by the Company (or such Restricted Subsidiary, as the case may be) is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following shall be deemed to be cash:

(a) any liabilities of the Company or any Restricted Subsidiary (as shown on the most recent consolidated balance sheet of the Company and its Restricted Subsidiaries other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guaranty) that are assumed by the transferee of any such assets pursuant to an agreement that releases the Company or any such Restricted Subsidiary from further liability with respect to such liabilities;

(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents within 180 days (to the extent of the cash or Cash Equivalents received in that conversion);

(c) any stock or assets of the kind referred to in clause (2) or (4) of the next paragraph of this covenant; and

(d) any Designated Non-cash Consideration received by the Company or any Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (d) that is at that time outstanding, not to exceed $15 million at the time of receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.

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Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any such Restricted Subsidiary may apply such Net Proceeds, at its option:

(1) to repay or repurchase Senior Indebtedness of the Company or any Subsidiary Guarantor or any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor;

(2) to make an Investment in (provided such Investment is in the form of Capital Stock), or to acquire all or substantially all of the assets of, a Person engaged in a Permitted Business if such Person is, or will become as a result thereof, a Restricted Subsidiary;

(3) to make a capital expenditure; or

(4) to acquire long lived assets (other than securities) to be used in a Permitted Business.

Pending the final application of any such Net Proceeds, the Company may temporarily reduce the revolving Indebtedness under the Senior Credit Facilities or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will be required to make an offer to purchase from all Holders (an “Asset Sale Offer”) and, if applicable, redeem or purchase (or make an offer to do so) any other Senior Subordinated Indebtedness of the Company, the provisions of which require the Company to redeem or purchase (or make an offer to do so) such Indebtedness with the proceeds from any Asset Sales, the maximum aggregate principal amount of notes and such other Senior Subordinated Indebtedness that may be purchased (on a pro rata basis) with such Excess Proceeds. The offer price for the notes in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash and the redemption or purchase price for such other Senior Subordinated Indebtedness shall be as set forth in the related documentation governing such Indebtedness. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not prohibited by the Indenture. If the aggregate purchase price of the notes and the other Senior Subordinated Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Company shall select the notes to be purchased on a pro rata basis but in round denominations, which in the case of the notes will be denominations of $2,000 initial principal amount and multiples of $1,000 thereafter. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds related to such Asset Sale Offer shall be reset at zero.

The Senior Credit Facilities prohibit the Company from purchasing any notes and also provide that certain asset sale events with respect to the Company would constitute a default under these agreements. Any future credit agreements or other agreements relating to Senior Indebtedness to which the Company becomes a party may contain similar restrictions and provisions. In the event an Asset Sale occurs at a time when the Company is prohibited from purchasing notes, the Company could seek the consent of its senior lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing notes. In such case, the Company’s failure to purchase tendered notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Indebtedness. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the holders of notes.

Merger, Consolidation or Sale of Assets

The Company may not (other than pursuant to the Merger): (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer,

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convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person unless:

(1) either (a) the Company is the surviving corporation or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation, limited liability company or partnership organized or existing under the laws of the United States, any State thereof or the District of Columbia; provided, however, that if such Person is a limited liability company or partnership, a corporate Wholly-Owned Subsidiary of such Person organized under the laws of the United States, any state thereof or the District of Columbia becomes a co-issuer of the notes in connection therewith;

(2) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Company under the notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

(3) immediately after such transaction no Default exists;

(4) (a) the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made will, after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock” or (b) the Fixed Charge Coverage Ratio of the Company or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made, after giving effect to the transaction and any related financings, would not be less than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction; and

(5) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture.

The preceding clause (4) will not prohibit:

(a) a merger between the Company and a Restricted Subsidiary or between Restricted Subsidiaries; or

(b) a merger between the Company and an Affiliate incorporated solely for the purpose of reincorporating the Company in another state of the United States.

In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This “— Merger, Consolidation or Sale of Assets” covenant will not be applicable to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Restricted Subsidiaries.

The Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Person unless:

(1) except in the case of a Subsidiary Guarantor (x) that has been disposed of in its entirety to another Person (other than to the Company or an Affiliate of the Company), whether through a merger, consolidation or sale of Capital Stock or assets or (y) that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be a Subsidiary, in both cases, if in connection therewith the Company provides an Officers’ Certificate to the Trustee to the effect that the Company will comply with its obligations under the covenant described under “— Asset Sales,” the resulting, surviving or

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transferee Person (if not such Subsidiary) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of the United States of America, or any State thereof or the District of Columbia, and such Person shall expressly assume, by a Guaranty Agreement, all the obligations of such Subsidiary, if any, under its Subsidiary Guaranty;

(2) immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and

(3) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guaranty Agreement, if any, complies with the Indenture.

The preceding clause (2) will not prohibit any Subsidiary Guarantor that is a limited liability company from merging with an Affiliate solely for the purpose of reincorporating such Subsidiary Guarantor as a corporation.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any of its Affiliates (each, an “Affiliate Transaction”), unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Company or such Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(2) the Company delivers to the Trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, a resolution of the Board of Directors of the Company and an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of such Board of Directors; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1) transactions between or among the Company and its Restricted Subsidiaries;

(2) any Restricted Payment that is permitted by the provisions of the Indenture described above under the caption “— Restricted Payments”;

(3) reasonable loans, advances, fees, benefits and compensation paid or provided to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary;

(4) transactions pursuant to any contract or agreement in effect on the Issue Date as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement, taken as a whole, is no less favorable in any material respect to the Company or such Restricted Subsidiary than the contract or agreement as in effect on the Issue Date;

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(5) transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Company solely because the Company owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

(6) the issuance or sale of Qualified Equity Interests (and the exercise of any warrants, options or other rights to acquire Qualified Equity Interests);

(7) to the extent that the Company and one or more of its Restricted Subsidiaries are members of a consolidated, combined or similar income tax group of which a direct or indirect parent of the Company is the common parent, payment of dividends or other distributions by the Company or one or more of its Restricted Subsidiaries pursuant to a tax sharing agreement or otherwise to the extent necessary to pay, and that are used to pay, any income taxes of such tax group that are attributable to the Company and its Restricted Subsidiaries and are not payable directly by the Company or any of its Restricted Subsidiaries; provided, however, that the amount of any such dividends or distributions (plus any such taxes payable directly by the Company and its Restricted Subsidiaries) shall not exceed the amount of such taxes that would have been payable directly by the Company and its Restricted Subsidiaries had the Company been the U.S. common parent of a separate tax group that included only the Company and its Restricted Subsidiaries;

(8) (a) the payment of fees to Sponsor pursuant to the Management Agreement not to exceed $500,000 (plus any amounts accrued pursuant to the following proviso) in any fiscal year of the Company; provided, however, that such payments may accrue but may not be paid during the existence of an Event of Default arising from clause (1), (2) or (7) of the provisions described under the caption “— Events of Default and Remedies”; and (b) payments by the Company to or on behalf of the direct or indirect parent of the Company in an amount sufficient to pay out-of-pocket legal, accounting and filing and other general corporate overhead costs of such parent, customary salary, bonus and other benefits payable to officers and employees of a director or indirect parent of the Company and franchise taxes and other fees required to maintain its existence, actually incurred by such parent; provided, however, that such costs, salaries, bonuses, benefits, taxes and fees are attributable to the ownership of the Company and its Restricted Subsidiaries;

(9) reimbursements of bona fide out-of-pocket expenses of Sponsor incurred in connection with the general administration and management of SHG Holdings Solutions, Inc., the Company and any Restricted Subsidiaries of the Company; provided, however, that, in the case of SHG Holdings Solutions, Inc, such expenses are attributable to the ownership of the Company and its Restricted Subsidiaries or consist of expenses related to becoming or maintaining its status as a public company;

(10) loans or advances to employees of the Company or any Restricted Subsidiary (x) in the ordinary course of business or (y) in connection with the purchase by such Persons of Equity Interests of any direct or indirect parent of the Company so long as the cash proceeds of such purchase received by such direct or indirect parent are contemporaneously contributed to the common equity capital of the Company;

(11) transactions and any series of transactions with an Insurance Subsidiary that is an Unrestricted Subsidiary in the ordinary course of business that otherwise have been approved by the Board of Directors of the Company and are consistent with clause (1) of the preceding paragraph;

(12) management, practice support and similar agreements with Related Professional Corporations entered into in the ordinary course of business and transactions pursuant thereto; and

(13) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture that are on terms no less favorable than those that would have been obtained in a comparable transaction with an unrelated party or on terms that are approved by the Board of Directors of the Company, including a majority of the disinterested directors.

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Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default and the conditions set forth in the definition of “Unrestricted Subsidiary” are met. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all outstanding Investments owned by the Company and its Restricted Subsidiaries (except to the extent repaid in cash or Cash Equivalents) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the covenant described above under the caption “— Restricted Payments” or under one or more of the clauses of the definition of Permitted Investments, as determined by the Company. All such outstanding Investments will be valued at their fair market value at the time of such designation, as certified to the Trustee in an Officers’ Certificate. That designation will only be permitted if such Restricted Payment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Anti-layering

The Company will not, and will not permit its Restricted Subsidiaries to, incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both:

(1) subordinate in right of payment to any Senior Indebtedness; and

(2) senior in right of payment to the notes or any Subsidiary Guaranty.

Neither the existence nor lack of a security interest nor the priority of any such security interest shall be deemed to affect the ranking or right of payment of any Indebtedness.

Future Guaranties

The Company will not permit any Domestic Restricted Subsidiary, directly or indirectly, to incur Indebtedness, or guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company or any Restricted Subsidiary, unless:

(1) such Indebtedness is incurred by such Restricted Subsidiary pursuant to clause (2), (4), (5), (6), (7) (with respect to Permitted Refinancing Indebtedness in respect of Indebtedness initially incurred under clause (2) or (4) only), (8), (11), (12), (14) or (15) of the covenant set forth under “— Incurrence of Indebtedness and Issuance of Preferred Stock” or pursuant to clause (10) of such covenant (with respect to Indebtedness incurred under any of the foregoing clauses);

(2) such Restricted Subsidiary is a Subsidiary Guarantor; or

(3) such Restricted Subsidiary simultaneously executes and delivers a Guaranty Agreement and becomes a Subsidiary Guarantor, which guarantee shall (a) with respect to any guarantee of Senior Indebtedness, be subordinated in right of payment on the same terms as the notes are subordinated to such Senior Indebtedness and (b) with respect to any guarantee of any other Indebtedness, be senior to or pari passu with such Restricted Subsidiary’s other Indebtedness or guarantee of or pledge to secure such other Indebtedness.

Business Activities

The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business, except to such extent as would not be material to the Company and their Restricted Subsidiaries taken as a whole.

Reports

So long as any notes are outstanding, the Company will (i) furnish to the Holders or cause the Trustee to furnish to the Holders in each case within the time periods that such information would have otherwise

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been required to have been provided to the Securities and Exchange Commission if the rules and regulations applicable to the filing of such information were applicable to the Company and (ii) post on its website within 10 Business Days thereafter:

(1) all quarterly and annual information that would be required to be contained in a filing with the Securities and Exchange Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants in accordance with the professional standards of the American Institute of Certified Public Accountants; and

(2) all current reports that would be required to be filed with the Securities and Exchange Commission on Form 8-K if the Company were required to file such reports.

The availability of the foregoing materials on the Securities and Exchange Commission’s EDGAR service shall be deemed to satisfy the Company’s delivery obligation.

Following the consummation of the exchange offer or registration of the notes contemplated by the Registration Rights Agreement, whether or not required by the Securities and Exchange Commission, the Company will file a copy of all the information and reports referred to in clauses (1) and (2) above with the Securities and Exchange Commission for public availability within the time periods specified in the Securities and Exchange Commission’s rules and regulations (unless the Securities and Exchange Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, the Company has agreed that, for so long as any notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d) (4) under the Securities Act. The Company will at all times comply with Trust Indenture Act Section 314(a).

Defaults

Each of the following is an Event of Default:

(1) a default in the payment of interest on the notes when due, continued for 30 days;

(2) a default in the payment of principal of any Note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;

(3) the failure by the Company to comply with its obligations under “— Change of Control” or the first paragraph under “— Certain Covenants — Merger and Consolidation” above;

(4) the failure by the Company to comply for 30 days after notice with any of its obligations in the covenants described above under “— Certain Covenants — Restricted Payments”, “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock” or “— Certain Covenants — Asset Sales”;

(5) the failure by the Company or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Indenture;

(6) Indebtedness of the Company, any Subsidiary Guarantor or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $15.0 million (the “cross acceleration provision”);

(7) certain events of bankruptcy or insolvency of the Company or any Significant Subsidiary (the “bankruptcy provisions”);

(8) the rendering of any judgment or decree for the payment of money in an amount, net of any insurance or indemnity payments actually received in respect thereof prior to or within 60 days from the entry thereof, or to be received in respect thereof in the event any appeal thereof shall be

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unsuccessful, in excess of $15.0 million against the Company or any Significant Subsidiary that is not discharged, bonded or insured by a third Person if either an enforcement proceeding thereon is commenced, or such judgment or decree remains outstanding for a period of 60 days and is not discharged, waived or stayed (the “judgment default provision”); or

(9) except as permitted by the Indenture, a Subsidiary Guaranty ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty.

However, a default under clauses (4) and (5) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding notes notify the Company of the default and the Company does not cure such default within the time specified after receipt of such notice.

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding notes may declare the principal of and accrued but unpaid interest on all the notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately; provided, however, that so long as any Indebtedness permitted to be incurred pursuant to the Senior Credit Facilities is outstanding, such acceleration will not be effective until the earlier of (1) the acceleration of such Indebtedness under the Senior Credit Facilities or (2) five Business Days after receipt by the Company of written notice of such acceleration. If an Event of Default relating to certain events of bankruptcy or insolvency of the Company occurs and is continuing, the principal of and interest on all of the outstanding notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

The Holders of a majority in aggregate principal amount of the then outstanding notes by notice to the Trustee may, on behalf of the Holders of all of such notes, waive any existing Default and its consequences under the Indenture, except a continuing Default in the payment of principal of and premium, if any, or interest on any such notes held by a non-consenting Holder.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25% in principal amount of the outstanding notes have requested the Trustee to pursue the remedy;

(3) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

If a Default occurs, is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of

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principal of or interest on any Note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is not opposed to the interest of the Holders. In addition, we are required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. We are required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action we are taking or propose to take in respect thereof.

Amendments and Waivers

Subject to certain exceptions, the Indenture may be amended with the consent of the Holders of a majority in principal amount of the notes then outstanding (including consents obtained in connection with a tender offer or exchange for the notes) and any past or existing default or compliance with any provisions may also be waived with the consent of the Holders of a majority in principal amount of the notes then outstanding. However, without the consent of each Holder of an outstanding Note affected thereby, an amendment or waiver may not, among other things:

(1) reduce the principal amount of notes whose Holders must consent to an amendment;

(2) reduce the rate of or extend the time for payment of interest on any Note;

(3) reduce the principal of or change the Stated Maturity of any Note;

(4) reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under “— Optional Redemption” above;

(5) make any Note payable in money other than that stated in the Note;

(6) impair the right of any Holder to receive payment of principal of and interest on such Holder’s notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s notes;

(7) make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions;

(8) make any change in the ranking or priority of any Note that would adversely affect the Holders; or

(9) make any change in, or release other than in accordance with the Indenture, any Subsidiary Guaranty that would adversely affect the Holders.

Notwithstanding the preceding, without the consent of any Holder, the Company, the Subsidiary Guarantors and Trustee may amend the Indenture:

(1) to cure any ambiguity, omission, defect or inconsistency;

(2) to provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under the Indenture;

(3) to provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code);

(4) to add guaranties with respect to the notes, including any Subsidiary Guaranties, or to secure the notes;

(5) to add to the covenants of the Company or a Subsidiary Guarantor for the benefit of the Holders or to surrender any right or power conferred upon the Company or a Subsidiary Guarantor;

(6) to make any change that does not adversely affect the rights of any Holder;

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(7) to comply with any requirement of the Securities and Exchange Commission in connection with the qualification of the Indenture under the Trust Indenture Act;

(8) to make any amendment to the provisions of the Indenture relating to the transfer and legending of notes; provided, however, that (a) compliance with the Indenture as so amended would not result in notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer notes;

(9) to conform the text of the Indenture or the Subsidiary Guaranties or the notes to any provision of this Description of Exchange Notes to the extent that such provision in this Description of Exchange Notes was intended to be a verbatim recitation of a provision of the Indenture or the Subsidiary Guaranties or the notes; or

(10) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the date of the Indenture.

However, no amendment may be made to the subordination provisions of the Indenture that adversely affects the rights of any holder of Senior Indebtedness of the Company or a Subsidiary Guarantor then outstanding unless the holders of such Senior Indebtedness (or their Representative) consent to such change.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under the Indenture becomes effective, we are required to mail to Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders, or any defect therein, will not impair or affect the validity of the amendment.

Neither the Company nor any Affiliate of the Company may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the notes unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

Transfer

The notes will be issued in registered form and will be transferable only upon the surrender of the notes being transferred for registration of transfer. We may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection with certain transfers and exchanges.

Satisfaction and Discharge

When we (1) deliver to the Trustee all outstanding notes for cancellation or (2) all outstanding notes have become due and payable by reason of the mailing of a notice of redemption or otherwise, or will become due and payable within one year, and, in the case of clause (2), we irrevocably deposit with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding notes, including interest thereon to maturity or such redemption date, and if in either case we pay all other sums payable under the Indenture by us, then the Indenture shall, subject to certain exceptions, cease to be of further effect.

Defeasance

At any time, we may terminate all our obligations under the notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes.

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In addition, at any time we may terminate our obligations under “— Change of Control” and under the covenants described under “— Certain Covenants” (other than the covenant described under “— Certain Covenants — Merger, Consolidation and Sale of Assets”), the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under “— Defaults” above and the limitations contained in clause (4) of the first paragraph under “— Certain Covenants — Merger, Consolidation and Sale of Assets” above (“covenant defeasance”).

We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise our legal defeasance option, payment of the notes may not be accelerated because of an Event of Default with respect thereto. If we exercise our covenant defeasance option, payment of the notes may not be accelerated because of an Event of Default specified in clause (3) (with respect only to obligations under “— Change of Control”), (4), (5), (6), (7) (with respect only to Significant Subsidiaries or (8) under “— Defaults” above or because of the failure of the Company to comply with clause (4) of the first paragraph under “— Certain Covenants — Merger, Consolidation and Sale of Assets” above. If we exercise our legal defeasance option or our covenant defeasance option, each Subsidiary Guarantor will be released from all of its obligations with respect to its Subsidiary Guaranty.

In order to exercise either of our defeasance options, we must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable federal income tax law).

Concerning the Trustee

Wells Fargo Bank N.A. is to be the Trustee under the Indenture. We have appointed Wells Fargo Bank N.A. as Registrar and Paying Agent with regard to the notes.

The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; provided, however, if it acquires any conflicting interest it must either eliminate such conflict within 90 days, apply to the Securities and Exchange Commission for permission to continue or resign.

The Holders of a majority in principal amount of the outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. If an Event of Default occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense and then only to the extent required by the terms of the Indenture.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor will have any liability for any obligations of the Company or any Subsidiary Guarantor under the notes, any Subsidiary Guaranty or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver and release may not be effective to waive liabilities under the U.S. federal securities laws, and it is the view of the Securities and Exchange Commission that such a waiver is against public policy.

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Governing Law

The Indenture and the notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

“Acquired Debt” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition (a “Disposition”) of any assets or rights (including by way of a sale and leaseback) outside of the ordinary course of business (provided, however, that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption “— Change of Control” and the provisions described above under the caption “— Certain Covenants — Merger, Consolidation or Sale of Assets” and not by the provisions of the Asset Sale covenant); and

(2) the issue or sale by the Company or any Restricted Subsidiary of Equity Interests of any of the Company’s Restricted Subsidiaries;

in the case of either clause (1) or (2), whether in a single transaction or a series of related transactions:

(a) that have a fair market value in excess of $5.0 million; or

(b) for net proceeds in excess of $5.0 million.

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1) a Disposition of assets by the Company to the Company or a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to any other Restricted Subsidiary;

(2) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(3) the issuance of Equity Interests by a Restricted Subsidiary in which the percentage interest (direct and indirect) in the Equity Interests of such Person owned by the Company after giving effect to such issuance, is at least equal to the percentage interest prior to such issuance;

(4) a Restricted Payment that is permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments”;

(5) a Disposition in the ordinary course of business;

(6) any Liens permitted by the Indenture and foreclosures thereon;

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(7) any exchange of property pursuant to Section 1031 of the Code, for use in a Permitted Business;

(8) the license or sublicense of intellectual property or other general intangibles;

(9) the lease or sublease of property in the ordinary course of business so long as the same does not materially interfere with the business of the Company and its Restricted Subsidiaries taken as a whole; and

(10) the sale or other disposition of cash or Cash Equivalents.

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the total obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction. For purposes hereof such present value shall be calculated using a discount rate equal to the rate of interest implicit in such Sale and Leaseback Transaction, determined by lessee in good faith on a basis consistent with comparable determinations of Capital Lease Obligations under GAAP; provided, however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

“Bankruptcy Cases” means Case No. LA 01 39678BB through LA 01 39697BB and LA 01 45516BB, LA 01 45520BB and LA 01 45525BB, in the United States Bankruptcy Court for the Central District of California, Los Angeles Division, which were the bankruptcy proceedings related to Company and certain of its Subsidiaries.

“Board of Directors” means (1) with respect to a Person that is a corporation or limited liability company, the board of directors, board of managers or equivalent governing board of such Person or any duly authorized committee thereof, (2) with respect to a Person that is a limited partnership, the board of directors, board of managers or equivalent governing board of such Person’s general partner, and (3) with respect to any other Person, the governing body of such Person most closely approximating the governing bodies contemplated in the preceding clauses (1) and (2).

“Board Resolution” means a copy of a resolution certified by the secretary or an assistant secretary of any Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means:

(1) United States dollars;

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(2) Government Securities having maturities of not more than twelve months from the date of acquisition;

(3) time deposit accounts, term deposit accounts, money market deposit accounts, time deposits, bankers’ acceptances, certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities of twelve months or less from the date of acquisition, overnight bank deposits, and demand deposit accounts in each case with any lender party to the Senior Credit Facilities or with any domestic commercial bank having capital and surplus in excess of $500 million and a Thomson Bank Watch Rating of “B” or better;

(4) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper having the rating of “P-2” (or higher) from Moody’s or “A-2” (or higher) from Standard & Poor’s and in each case maturing within twelve months after the date of acquisition; and

(6) any fund investing substantially all its assets in investments that constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

“Change of Control” means the occurrence of any of the following:

(1) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Sponsor or a Related Party of the Sponsor;

(2) the adoption of a plan relating to the liquidation or dissolution of the Company;

(3) prior to the first Public Equity Offering, the Sponsor and its Related Parties cease to be the “beneficial owners” (as defined in Rule 13d-3 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of a majority of the total voting power of the Voting Stock of the Company, whether as a result of the issuance of securities of the Company, any merger, consolidation, liquidation or dissolution of the Company, any direct or indirect transfer of securities by the Sponsor and its Related Parties or otherwise;

(4) on or after the first Public Equity Offering with respect to the Company or any direct or indirect parent entity (the “Public Company”), if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either of the foregoing), including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, other than the Sponsor and its Related Parties, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35.0% or more of the total voting power of the Voting Stock of the Public Company (or, if the Company is not wholly owned directly or indirectly by the Public Company, the Company); provided, however, that the Sponsor and its Related Parties are the “beneficial owners” (as defined in Rule 13d-3 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, in the aggregate of a lesser percentage of the total voting power of the Voting Stock of the Public Company (or, if applicable, the Company) than such other Person or group; or

(5) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors of the Company.

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“Code” means the Internal Revenue Code of 1986, as amended.

“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period, plus (minus) to the extent deducted (added) in computing such Consolidated Net Income:

(1) provision for taxes based on income or profits of such Person and its Subsidiaries for such period; plus (minus)

(2) Fixed Charges; plus (minus)

(3) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period; plus (minus)

(4) any non-capitalized transaction costs incurred in connection with actual or proposed financings, acquisitions or divestitures (including financing and refinancing fees and costs incurred in connection with the Transactions); plus

(5) the amount of any payments to Affiliates of the type contemplated by clauses (8) or (9) of the second paragraph of the covenant set forth under “— Certain Covenants — Transactions With Affiliates” made during the applicable period; plus (minus)

(6) Minority Interest with respect to any Restricted Subsidiary; plus (minus)

(7) Consolidated Restructuring Costs; plus (minus)

(8) costs and expenses incurred in connection with the establishment and initial implementation of policies and procedures for complying with the Sarbanes-Oxley Act of 2002; plus (minus)

(9) startup losses incurred in connection with acquisitions or initial openings of facilities; plus (minus)

(10) all lease payments in respect of operating leases arising out of Sale and Leaseback Transactions with respect to which and to the extent that the Company or any Restricted Subsidiary was deemed to have incurred Attributable Debt.

Notwithstanding the preceding, the provision for taxes on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Subsidiary of the referent Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent (and in the same proportion) that Net Income of such Subsidiary was included in calculating Consolidated Net Income of such Person.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:

(1) the interest expense of such Person and its Restricted Subsidiaries for such period, on a combined, consolidated basis, determined in accordance with GAAP (including amortization of original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments, if any, pursuant to Hedging Obligations; provided, however, that in no event shall any amortization of deferred financing costs be included in Consolidated Interest Expense) plus the interest component of all payments associated with Attributable Debt determined by such Person in good faith on a basis consistent with comparable determinations for Capital Lease Obligations under GAAP; plus

(2) the consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued.

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Notwithstanding the preceding, the Consolidated Interest Expense with respect to any Restricted Subsidiary that is not a Wholly-Owned Subsidiary shall be included only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, plus (minus) to the extent deducted (added) in computing such Net Income:

(1) direct or indirect fees, costs, expenses and charges (including any penalties or premiums payable) of the Company related to the Transactions which are paid, taken or otherwise accounted for within one year of the consummation of the Transactions; plus (minus)

(2) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any Asset Sale or (b) the acquisition or disposition of any securities by such Person or any of its Restricted Subsidiaries plus (minus);

(3) any extraordinary, nonrecurring or non-operating gain or loss, together with any related provision for taxes on such extraordinary, nonrecurring or non-operating gain or loss;

provided, however, that:

(1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary (other than APS-Summit Care Pharmacy L.L.C., a Delaware limited liability company) or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or (subject to clause (2) below) a Restricted Subsidiary thereof;

(2) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such Net Income is not at the date of determination permitted without any prior governmental approval that has not been obtained or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary, except to the extent of the amount of dividends or other distributions actually paid to the Company or any of its Restricted Subsidiaries by such Restricted Subsidiary during such period; and

(3) the cumulative effect of a change in accounting principles shall be excluded.

“Consolidated Restructuring Costs” means, for any period, restructuring or reorganization costs related to the Bankruptcy Cases incurred by the Company and its Restricted Subsidiaries during such period, calculated in accordance with GAAP; provided, however, that the aggregate amount of such costs for any consecutive four fiscal quarter period shall not exceed $1,000,000.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who:

(1) was a member of such Board of Directors of the Company on the Issue Date after giving effect to the Merger;

(2) was nominated for election or elected to such Board of Directors of the Company with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election; or

(3) was nominated by the Sponsor or a Related Party thereof.

“Contribution Indebtedness” means any Indebtedness or Preferred Stock incurred pursuant to clause (16) of the second paragraph under the covenant “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock.”

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“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Non-cash Consideration” means, the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by an executive vice president and the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

“Designated Senior Debt” means:

(1) any Indebtedness outstanding under the Senior Credit Facilities; and

(2) any other Senior Indebtedness permitted under the Indenture the principal amount of which is $50.0 million or more and that has been designated by the Company as “Designated Senior Debt.”

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would not qualify as Disqualified Stock but for change of control or asset sale provisions shall not constitute Disqualified Stock if the provisions are not more favorable to the holders of such Capital Stock than the provisions described under “— Change of Control” and “— Certain Covenants — Asset Sales”, respectively, and such Capital Stock specifically provides that the Company will not redeem or repurchase any such Capital Stock pursuant to such provisions prior to the Company’s purchase of the notes as required pursuant to the provisions described under “— Change of Control” and “— Certain Covenants — Asset Sales”, respectively.

“Domestic Restricted Subsidiary” means, with respect to the Company, any Restricted Subsidiary that was formed under the laws of the United States of America or any State thereof or the District of Columbia.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Exchange Notes” means the debt securities of the Company issued pursuant to the Indenture in exchange for, and in an aggregate principal amount not to exceed, the notes, in compliance with the terms of the Registration Rights Agreement.

“Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Senior Credit Facilities or represented by the notes) in existence on the Issue Date after giving effect to the Merger, until such amounts are repaid.

“Fixed Charge Coverage Ratio” means with respect to any Person or Persons for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

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In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1) acquisitions that have been made by the Company or any Restricted Subsidiary, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated to include the Consolidated Cash Flow of the acquired entities on a pro forma basis (which shall be determined in good faith by the chief financial officer of the Company) after giving effect to Pro Forma Cost Savings, shall be deemed to have occurred on the first day of the four-quarter reference period;

(2) the Consolidated Cash Flow attributable to operations or businesses disposed of prior to the Calculation Date shall be excluded;

(3) the Fixed Charges attributable to operations or businesses disposed of prior to the Calculation Date shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

(4) if (i) any Restricted Subsidiary is designated as an Unrestricted Subsidiary or (ii) any Unrestricted Subsidiary is designated as a Restricted Subsidiary, in either case during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, such designation will be deemed to have occurred on the first day of the four-quarter reference period; and

(5) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

(1) the Consolidated Interest Expense of such Person for such period; plus

(2) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such guarantee or Lien is called upon; plus

(3) the product of (a) all dividend payments, whether paid or accrued and whether or not in cash, on any series of Preferred Stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Qualified Equity Interests, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

“Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not organized under the laws of the United States of America or any State thereof or the District of Columbia.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4) the rules and regulations of the Securities and Exchange Commission governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff

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accounting bulletins and similar written statements from the accounting staff of the Securities and Exchange Commission.

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America and the payment for which the United States pledges its full faith and credit.

“guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including letters of credit and reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

“Guaranty Agreement” means a supplemental indenture, in the form reasonably acceptable to the Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s obligations under the Indenture and with respect to the notes on the terms provided for in the Indenture.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and

(2) other agreements or arrangements designed to change the allocation of risk due to fluctuations in interest rates, currency exchange rates or commodity prices.

“Holder” or “Noteholder” means the Person in whose name a Note is registered on the Registrar’s books.

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, in respect of:

(1) borrowed money;

(2) obligations evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(3) bankers’ acceptances;

(4) Capital Lease Obligations;

(5) Attributable Debt; or

(6) (a) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable or (b) representing the net amount payable in respect of any Hedging Obligations;

if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” with respect to a specified Person includes (i) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person), but only to the extent that the aggregate amount of such Indebtedness does not exceed fair market value of the asset and, to the extent not otherwise included, the guarantee by such Person of any Indebtedness of any other Person; provided, however, that Indebtedness shall not include the pledge by the Company of the Capital Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of such Unrestricted Subsidiary and (ii) all Disqualified Stock of the Specified Person. In no event shall non-contractual obligations or liabilities in respect of any Capital Stock constitute Indebtedness under this definition.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above; provided, however, that in the case of Indebtedness sold at a discount or which does not require current payments of interest, the amount of such Indebtedness at any time will be the accreted value thereof at such time.

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“Insurance Subsidiary” means any Subsidiary of the Company (including Fountain View Reinsurance, Ltd.) that is engaged solely in the medical malpractice insurance business, workers compensation and other insurance business for the underwriting of insurance policies for, or for the benefit of, the Company and its Subsidiaries and Related Professional Corporations and those employees, officers, directors and contractors of the foregoing Persons who provide professional medical services to patients.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel advances and other loans and advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary, then the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of determined at the time of such sale or disposition. Notwithstanding the foregoing, purchases, redemptions or other acquisitions of Equity Interests of the Company or any direct or indirect parent of the Company shall not be deemed Investments. The amount of an investment shall be determined at the time the Investment is made and without giving effect to subsequent changes in value.

“Issue Date” means December 27, 2005.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any option or other agreement to sell or give a security interest in and any consensual filing of any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than filings in respect of leases otherwise permitted under the Indenture.

“Management Agreement” means the Management Agreement to be dated as of the Issue Date among the Company and Onex Partners Manager LP, as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement, taken as a whole, is no less favorable in any material respect to the Company or any Restricted Subsidiary than the contract or agreement as in effect on the Issue Date.

“Merger” means the Merger of SHG Acquisition Corp. with and into the Company with the Company continuing as the surviving corporation pursuant to the Agreement and Plan of Merger, dated as of October 22, 2005, between the Company, SHG Acquisition Corp., SHG Holding Solutions, Inc. and the agent and certain warrant holders party thereto.

“Minority Interest” means, with respect to any Person, interests in income (loss) of any of such Person’s Subsidiaries held by one or more Persons other than such Person or another Subsidiary of such Person, as reflected on such Person’s consolidated financial statements.

“Moody’s” means Moody’s Investment Service, Inc. and any successor to its rating agency business.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however:

(1) any income or expense incurred in connection with the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries;

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(2) any depreciation, amortization, non-cash impairment or other non-cash charges or expenses recorded as a result of the application of purchase accounting in accordance with Accounting Principles Board Opinion Nos. 16 and 17 or SFAS Nos. 141 and 142; and

(3) any gain, loss, income, expense or other charge recognized or incurred in connection with changes in value or dispositions of Investments made pursuant to clause (8) of the definition of Permitted Investments (it being understood that this clause (3) shall not apply to any expenses incurred in connection with the funding of contributions to any plan).

“Net Proceeds” means the aggregate cash proceeds received by the Company or any Restricted Subsidiary in respect of any Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including (a) fees and expenses related to such Asset Sale (including legal, accounting and investment banking fees and discounts, and sales and brokerage commissions, and any relocation expenses incurred as a result of the Asset Sale), (b) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (c) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under the Senior Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale, (d) any reserve in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the seller after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale and (e) cash escrows (until released from escrow to the seller).

“Non-Recourse Debt” means Indebtedness:

(1) as to which neither the Company nor any Restricted Subsidiary:

(a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);

(b) is directly or indirectly liable as a guarantor or otherwise; or

(c) constitutes the lender;

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

(3) as to which the lenders have been notified in writing that they will not have any recourse to the stock (other than stock of an Unrestricted Subsidiary pledged by the Company to secure debt of such Unrestricted Subsidiary) or assets of the Company or such Restricted Subsidiary.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Officer” means the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company.

“Officers’ Certificate” means a certificate signed by two Officers.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.

“Permitted Business” means any business in which the Company and the Restricted Subsidiaries are engaged on the Issue Date or any business reasonably related, ancillary or complementary thereto, or reasonable extensions thereof.

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“Permitted Investments” means:

(1) any Investment in the Company or in any Restricted Subsidiary;

(2) any Investment in Cash Equivalents;

(3) any Investment in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary;

(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Certain Covenants — Asset Sales” or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date;

(6) other Investments made after the Issue Date in a Permitted Business having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (6) after the Issue Date that are at the time outstanding, not to exceed the greater of (a) $15.0 million or (b) 2.0% of the Total Assets of the Company;

(7) any Investment made for consideration consisting solely of Qualified Equity Interests;

(8) any Investment made in connection with the funding of contributions under any non-qualified employee retirement plan or similar employee compensation plan in an amount not to exceed the amount of compensation expense recognized by the Company and any Restricted Subsidiary in connection with such plans;

(9) any Investment received in compromise or resolution of (a) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any Restricted Subsidiary, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer or (b) litigation, arbitration or other disputes with Persons that are not Affiliates;

(10) Hedging Obligations permitted under the covenant described above under “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;

(11) any Investment consisting of prepaid expenses, negotiable instruments held for collection and lease, endorsements for deposit or collection in the ordinary course of business, utility or workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

(12) pledges or deposits by a Person under workers compensation laws, unemployment insurance laws or similar legislation, or deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

(13) any Investment consisting of a loan or advance to officers, directors or employees of the Company or a Restricted Subsidiary in connection with the purchase by such Persons of Equity Interests of the Company or any direct or indirect parent of the Company so long as the cash proceeds of such purchase received by the Company or such other Person are contemporaneously contributed to the common equity capital of the Company;

(14) loans or advances to employees made in the ordinary course of business of the Company or any Restricted Subsidiary of the Company in an aggregate principal amount not to exceed $2 million at any one time outstanding;

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(15) repurchases of the notes;

(16) guarantees of Indebtedness permitted under the covenant described in “— Certain Covenants — Incurrence of Indebtedness and Issuance of Disqualified Stock;” and

(17) other Investments made after the Issue Date in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (17) after the Issue Date, not to exceed the greater of (a) $15.0 million or (b) 2.0% of the Total Assets of the Company.

“Permitted Junior Securities” means:

(1) Equity Interests in the Company or any Subsidiary Guarantor; or

(2) debt securities that are subordinated to all Senior Indebtedness and any debt securities issued in exchange for Senior Indebtedness to substantially the same extent as, or to a greater extent than, the notes and the Subsidiary Guarantees are subordinated to Senior Indebtedness under the Indenture.

“Permitted Liens” means:

(1) Liens in favor of the Company or any Restricted Subsidiary;

(2) Liens on assets of the Company or any Restricted Subsidiary securing Senior Indebtedness that was permitted by the terms of the Indenture to be incurred;

(3) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary, provided, however, that such Liens were not incurred in contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or any Restricted Subsidiary;

(4) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary, provided, however, that such Liens were not incurred in contemplation of such acquisition;

(5) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;

(6) Liens to secure Refinancing Indebtedness where the Indebtedness being Refinanced was secured by the same assets; provided, however, that such Liens do not extend to any additional assets (other than improvements and accession thereon and replacements thereof or proceeds or distributions thereof);

(7) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary with respect to obligations that do not exceed $7.5 million at any one time outstanding and that: (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary;

(8) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(9) Liens created for the benefit of (or to secure) the notes (or the Subsidiary Guaranties) or payment obligations to the Trustee;

(10) Liens and rights of setoff in favor of a bank imposed by law and incurred in the ordinary course of business on deposit accounts maintained with such bank and cash and Cash Equivalents in such accounts;

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(11) Liens securing Hedging Obligations;

(12) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(13) Liens existing on the date of the Indenture;

(14) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided, however, that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor; and

(15) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, defease or discharge or refund (collectively, “Refinance”) other Indebtedness of the Company or any Restricted Subsidiary; provided, however, that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, discharged, defeased or refunded (plus the amount of reasonable expenses and premiums incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, defeased, discharged or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased, refunded or discharged is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, defeased, discharged or refunded;

(4) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor may not be used to Refinance any Indebtedness of the Company or a Subsidiary Guarantor.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person. The “principal” amount of any Preferred Stock at any date shall be the liquidation preference (or, if greater, the mandatory redemption price, if any) of such Preferred Stock at such date.

“principal” of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.

“Pro Forma Cost Savings” means, with respect to any period, the reductions in costs (including such reductions resulting from employee terminations, facilities consolidations and closings, standardization of employee benefits and compensation policies, consolidation of property, casualty and other insurance coverage and policies, standardization of sales and distribution methods, reductions in taxes other than income taxes) that occurred during such period that are (1) directly attributable to an asset acquisition or (2) implemented, committed to be implemented, specifically identified to be implemented or the

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commencement of implementation of which has begun in good faith by the business that was the subject of any such asset acquisition within six months of the date of the asset acquisition and that are supportable and quantifiable by the underlying records of such business, as if, in the case of each of clauses (1) and (2), all such reductions in costs had been effected as of the beginning of such period, decreased by any incremental expenses incurred or to be incurred during such period in order to achieve such reduction in costs, all such costs to be determined in good faith by the chief financial officer of the Company.

“Public Equity Offering” means an underwritten primary public offering of common stock of the Company or any direct or indirect parent entity pursuant to an effective registration statement under the Securities Act; provided, however, for the purposes of the optional redemption of notes described under “— Optional Redemption”, if such offering is of common stock of any such parent entity, the net proceeds therefrom have been contributed to the common equity capital of the Company.

“Qualified Equity Interests” means Equity Interests of the Company other than Disqualified Stock.

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue Date among the Company, the Subsidiary Guarantors, Credit Suisse First Boston LLC and J.P. Morgan Securities Inc.

“Related Party” with respect to any Sponsor means:

(1) any controlling stockholder or partner, 80% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Sponsor; or

(2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a 51% or more controlling interest of which consist of such Sponsor and/or such other Persons referred to in the immediately preceding clause (1);

provided, however, that “Related Party” shall not include any portfolio operating companies of Sponsor.

“Related Professional Corporation” means a professional corporation that is owned by one or more physicians, independent contractor physicians or healthcare facilities in each case (a) to whom the Company, any Restricted Subsidiary of the Company or another Related Professional Corporation provides management services pursuant to a management services, practice support or similar agreement and (b) except for the effect of the preceding clause (a), is not otherwise an Affiliate of the Company or its Restricted Subsidiaries.

“Representative” means, with respect to a Person, any trustee, agent or representative (if any) for an issue of Senior Indebtedness of such Person.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

“Sale and Leaseback Transaction” means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of any property, whether owned by the Company or any such Restricted Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or any such Restricted Subsidiary to such Person or any other Person from whom funds have been or are to be advanced by such Person on the security of such property.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness of the Company secured by a Lien.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Senior Credit Facilities” means the Second Amended and Restated First Lien Credit Agreement dated as of the Issue Date among the Company, SHG Holding Solutions, Inc., Credit Suisse, as administrative agent and collateral agent and as sole lead arranger and sole bookrunner, and the other agents and lenders named therein, providing for revolving credit borrowings and term loans, including any

162

related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time including increases in principal amount.

“Senior Indebtedness” means with respect to any Person:

(1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred; and

(2) all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above

unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such Indebtedness or other obligations are subordinate or pari passu in right of payment to the notes or the Subsidiary Guaranty of such Person, as the case may be; provided, however, that Senior Indebtedness shall not include:

(1) any obligation of such Person to the Company or any Subsidiary;

(2) any liability for federal, state, local or other taxes owed or owing by such Person;

(3) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

(4) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(5) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of the Indenture.

“Senior Subordinated Indebtedness” means, with respect to a Person, the notes (in the case of the Company), the Subsidiary Guaranty (in the case of a Subsidiary Guarantor) and any other Indebtedness of such Person that specifically provides that such Indebtedness is to rank pari passu with the notes or such Subsidiary Guaranty, as the case may be, in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other Obligation of such Person which is not Senior Indebtedness of such Person.

“Significant Subsidiary” means any Restricted Subsidiary, or group of Restricted Subsidiaries, that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Sponsor” means Onex Partners LP, Onex Corporation and their respective Affiliates other than portfolio operating companies of any of the foregoing.

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subordinated Obligation” means, with respect to a Person, any Indebtedness of such Person (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the notes or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a written agreement to that effect.

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“Subsidiary” means, with respect to any Person:

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership or limited liability company (a) the sole general partner or the managing general partner or managing member of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

“Subsidiary Guarantor” means a Subsidiary of the Company that guarantees the Company’s payment obligations under the Indenture and the notes.

“Subsidiary Guaranty” means each senior subordinated guarantee by each Subsidiary of the Company’s payment obligations under the Indenture and the notes pursuant to the Indenture or contained in a Guaranty Agreement, executed pursuant to the Indenture.

“Total Assets” means the total combined, consolidated assets of the Company and its Restricted Subsidiaries, as would be shown on the Company’s consolidated balance sheet in accordance with GAAP on the date of determination.

“Transactions” means the acquisition of the Company by SHG Acquisition Corp., the Merger, the cash equity contribution relating thereto, the issuance and sale of the notes, the execution and delivery of the Senior Credit Facilities and documents related thereto and the initial extension of credit thereunder, and other transactions contemplated by the merger agreement entered into and consummated in connection with such acquisition and the payment of fees and expenses in connection with the foregoing.

“Trustee” means Wells Fargo Bank N.A. until a successor replaces it and, thereafter, means the successor.

“Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the Issue Date.

“Trust Officer” means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.

“Unrestricted Subsidiary” means with respect to the Company, any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any Restricted Subsidiary; and

(3) has no Subsidiaries that are Restricted Subsidiaries.

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments.” On the Issue Date, Fountain View Reinsurance, Ltd. will be an Unrestricted Subsidiary without any further action on the part of the Company. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption

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“— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”, the Company shall be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall be permitted only if (1) such Indebtedness is permitted under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock” and (2) no Default would be in existence following such designation.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying: (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by

(2) the then outstanding principal amount of such Indebtedness.

“Wholly-Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or one or more other Wholly-Owned Subsidiaries.

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CERTAIN U.S. FEDERAL TAX CONSIDERATIONS

The following is a summary of certain material U.S. federal income tax considerations relating to the exchange of private notes for exchange notes pursuant to this exchange offer, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, or Code, Treasury Regulations promulgated under the Code, administrative rulings and judicial decisions, all as in effect on the date of this prospectus. These authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below. We have not sought and will not seek any ruling from the Internal Revenue Service, or IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions.

This summary is limited to holders who purchased the notes upon their initial issuance at their initial issue price and who hold the notes as capital assets. This summary also does not address the effect of the U.S. federal estate or gift tax laws or the tax considerations arising under the laws of any foreign, state or local jurisdiction. In addition, this discussion does not address tax considerations applicable to an investor’s particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

•  holders subject to the alternative minimum tax;

•  banks, insurance companies, or other financial institutions;

•  tax-exempt organizations;

•  real estate investment companies;

•  regulated investment companies;

•  dealers in securities or commodities;

•  expatriates and certain former citizens or long-term residents of the United States;

•  traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

•  foreign persons or entities;

•  persons that are S-corporations, partnerships or other pass-through entities;

•  holders that are “United States persons,” as defined by the Code, whose functional currency is not the U.S. dollar;

•  persons that hold the notes as a position in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction; or

•  persons deemed to sell the notes under the constructive sale provisions of the Code.

THIS SUMMARY OF CERTAIN U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AS WELL AS ANY TAX CONSEQUENCES OF THE EXCHANGE OFFER ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

Exchange of Private Notes for Exchange Notes

The exchange of private notes for exchange notes in the exchange offer will not be treated as an “exchange” for U.S. federal income tax purposes because the exchange notes will not be considered to differ materially in kind or extent from the private notes. Accordingly, the exchange of private notes for exchange notes will not be a taxable event to holders for U.S. federal income tax purposes. Moreover, the exchange notes will have the same tax attributes as the private notes and the same tax consequences to holders as the private notes have to holders, including, without limitation, the same adjusted tax basis and holding period. Therefore, references to “notes” apply equally to the exchange notes and the private notes.

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PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for private notes where such private notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resales.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. By acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holder of the notes) other than commissions or concession of any brokers or dealers and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

The broker-dealer acknowledges and agrees that, upon receipt of notice from us of the happening of any event which:

•  makes any statement in this prospectus untrue in any material respect;

•  requires the making of any changes in this prospectus to make the statements in this prospectus not misleading; or

•  may impose upon us disclosure obligations that may have a material adverse effect on us,

which notice we agree to deliver promptly to the broker-dealer, the broker-dealer will suspend use of this prospectus until we have notified the broker-dealer that delivery of the prospectus may resume and have furnished copies of any amendment or supplement to this prospectus to the broker-dealer.

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LEGAL MATTERS

The validity of the exchange notes offered hereby will be passed upon for us by Latham & Watkins LLP, Costa Mesa, California.

EXPERTS

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2004 and 2005, and for each of the three years in the period ended December 31, 2005, as set forth in their report. We’ve included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We filed with the Securities and Exchange Commission a registration statement on Form S-4 under the Securities Act with respect to the exchange offers covered by this prospectus. This prospectus does not contain all the information included in the registration statement nor all of the exhibits. Additional information about us is included in the registration statement and the exhibits. Statements contained in this prospectus regarding the contents of any contract or any other document to which reference is made are not necessarily complete, and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference. A copy of the registration statement and the exhibits filed may be inspected without charge at the public reference room maintained by the Securities and Exchange Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained upon the payment of the fees prescribed by the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. The address of this Web site is http://www.sec.gov. You may request a copy of any of our filings with the Securities and Exchange Commission, or any of the agreements or other documents that might constitute exhibits to those filings, at no cost, by writing or telephoning us at the following address or phone number:

Skilled Healthcare Group, Inc.

27442 Portola Parkway, Suite 200

Foothill Ranch, CA 92610

Attention: General Counsel

Telephone: (949) 282-5800

To obtain delivery of any of our filings, agreements or other documents, you must make your request to us no later than five business days before the expiration date of the exchange offer. The exchange offer will expire at 5:00 p.m., New York City time on          , 2006. The exchange offer can be extended by us in our sole discretion. See “The Exchange Offer — Expiration Date.”

So long as we are subject to the periodic reporting requirements of the Exchange Act, we are required to furnish the information required to be filed with the SEC to the trustee and the holders of the private notes and the exchange notes. We have agreed that, while any of the notes remain outstanding even if we are not required under the Exchange Act to furnish such information to the SEC, we will nonetheless continue to furnish information that would be required to be furnished by us by Section 13 of the Exchange Act.

Our website is located at www.skilledhealthcare.com. The information on our website does not constitute a part of this prospectus.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Stockholders’ Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Skilled Healthcare Group, Inc.

We have audited the accompanying consolidated balance sheets of Skilled Healthcare Group, Inc. (the Company) as of December 31, 2004 and 2005, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial schedules listed in the Index at Item 21(b). These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2004 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/  Ernst & Young LLP

Orange County, California

September 15, 2006

F-2

Skilled Healthcare Group, Inc.

Consolidated Balance Sheets

(In thousands, except for share and per share data)

	Predecessor			Successor		Successor
	December 31,			December 31,		June 30,
	2004			2005		2006
						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,666		$	37,272	$	9,736
Accounts receivable, less allowance for doubtful accounts of $4,750 in 2004, $5,678 in 2005, and $7,072 in 2006		38,359			59,530		72,601
Assets held for sale		12,204			—		—
Deferred income taxes		—			12,627		12,914
Prepaid expenses		3,388			5,996		4,203
Other current assets		3,034			12,475		9,349
Total current assets		61,651			127,900		108,803
Property and equipment, net		192,397			191,151		214,913
Other assets:
Notes receivable, less allowance for doubtful accounts of $1,288 in 2004, $631 in 2005, and $631 in 2006		4,087			3,916		3,501
Deferred financing costs		8,769			18,551		16,813
Goodwill		23,098			396,035		407,302
Intangible assets, net		3,766			35,823		35,708
Deferred income taxes		—			25,514		26,683
Other assets		15,092			15,030		19,182
Total other assets		54,812			494,869		509,189
Total assets	$	308,860		$	813,920	$	832,905
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities	$	24,520		$	45,877	$	56,656
Employee compensation and benefits		15,816			18,669		20,917
Liabilities held for sale		4,371			—		—
Current portion of long-term debt and capital leases		1,908			2,918		2,930
Total current liabilities		46,615			67,464		80,503
Long-term liabilities:
Insurance liability risks		31,178			28,414		29,816
Deferred income taxes		—			26,256		24,188
Other long-term liabilities		2,565			8,530		8,937
Long-term debt and capital leases, less current portion		278,977			460,391		459,004
Total liabilities		359,335			591,055		602,448
Stockholders’ (deficit) equity:
Common stock 1,000 shares authorized, $0.01 par value per share; 1,000 shares issued and outstanding at December 31, 2005 and June 30, 2006 (unaudited), respectively		—			—		—
Preferred stock, 1,000,000 shares authorized with 15,000 shares designated as Series A, issued and outstanding at December 31, 2004		15,469			—		—
Common stock — Class A, 2,125,000 shares authorized, $0.01 par value per share; 1,193,587 shares issued and outstanding at December 31, 2004		12			—		—
Common stock — Class B Non-Voting 375,000 shares authorized, $0.01 par value per share; 65,731 shares issued and outstanding at December 31, 2004		1			—		—
Deferred compensation		(848	)		—		—
Additional paid-in-capital		108,255			222,865		222,865
Accumulated (deficit) earnings		(170,824	)		—		7,817
Due from stockholder		(2,540	)		—		—
Accumulated other comprehensive loss		—			—		(225	)
Total stockholders’ (deficit) equity		(50,475	)		222,865		230,457
Total liabilities and stockholders’ (deficit) equity	$	308,860		$	813,920	$	832,905

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Skilled Healthcare Group, Inc.

Consolidated Statements of Operations

(In thousands)

										Six Months Ended
	Predecessor									June 30,
	For the Years Ended December 31,									Predecessor			Successor
	2003			2004			2005			2005			2006
										(Unaudited)
Revenue	$	316,939		$	371,284		$	462,847		$	220,429		$	256,357
Expenses:
Operating		246,254			281,395			347,228			166,530			190,741
General and administrative		18,758			24,687			43,323			14,784			18,634
Depreciation and amortization		8,069			8,597			9,991			4,966			7,247
Rent		7,629			8,344			10,276			5,036			4,983
		280,710			323,023			410,818			191,316			221,605
Income from continuing operations before other income (expenses), (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		36,229			48,261			52,029			29,113			34,752
Other income (expenses):
Interest expense		(27,486	)		(22,370	)		(27,629	)		(11,123	)		(22,839	)
Interest income and other		147			789			949			362			628
Equity in earnings of joint venture		1,161			1,701			1,787			913			892
Reversal of a charge related to decertification of a facility		2,734			—			—			—			—
Change in fair value of interest rate hedge		(1,006	)		(926	)		(165	)		(152	)		56
Reorganization expenses		(12,964	)		(1,444	)		(1,007	)		(457	)		—
Write-off of deferred financing costs		(4,111	)		(7,858	)		(16,626	)		(11,021	)		—
Forgiveness of stockholder loan		—			—			(2,540	)		—			—
Gain on sale of assets		—			—			980			—			—
Total other income (expenses), net		(41,525	)		(30,108	)		(44,251	)		(21,478	)		(21,263	)
(Loss) income before (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		(5,296	)		18,153			7,778			7,635			13,489
(Benefit from) provision for income taxes		(1,645	)		4,421			(13,048	)		(10,279	)		5,672
(Loss) income before discontinued operations and cumulative effect of a change in accounting principle		(3,651	)		13,732			20,826			17,914			7,817
Discontinued operations, net of tax		1,966			2,789			14,740			14,838			—
Cumulative effect of a change in accounting principle, net of tax		(12,261	)		—			(1,628	)		—			—
Net (loss) income	$	(13,946	)	$	16,521		$	33,938		$	32,752		$	7,817
Accretion on preferred stock		—			(469	)		(498	)		(498	)		—
Net (loss) income attributable to common stockholders	$	(13,946	)	$	16,052		$	33,440		$	32,254		$	7,817

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Skilled Healthcare Group, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands except for share amounts)

																											Accumulated
													Class B Non-Voting								Additional			Accumulated			Other
	Preferred Stock						Common Stock						Common Stock					Deferred			Paid-In			(Deficit)			Comprehensive			Due From
	Shares			Amount			Shares			Amount			Shares			Amount		Comp			Capital			Earnings			Loss			Stockholder			Total
Predecessor
Balance at December 31, 2002		—		$	—			1,134,944		$	11			—		$	—	$	—		$	106,488		$	(173,399	)		—		$	(2,540	)	$	(69,440	)
Cancellation and issuance of new common stock in Reorganized Fountain View, Inc.		—			—			1			(11	)		—			—		—			11			—			—			—			—
Issuance of new common stock to holders of indenture notes		—			—			58,642			—			—			—		—			1,073			—			—			—			1,073
Net loss		—			—			—			—			—			—		—			—			(13,946	)		—			—			(13,946	)
Balance at December 31, 2003		—			—			1,193,587			—			—			—		—			107,572			(187,345	)		—			(2,540	)		(82,313	)
Change in terms of preferred stock		15,000			15,000			—			—			—			—		—			—			—			—			—			15,000
Accretion on preferred stock		—			469			—			—			—			—		—			(469	)		—			—			—			—
Issuance of restricted stock		—			—			—			—			70,661			1		—			3			—			—			—			4
Cancellation of restricted stock		—			—			—			—			(4,930	)		—		—			—			—			—			—			—
Deferred compensation related to restricted stock awards		—			—			—			—			—			—		(1,161	)		1,161			—			—			—			—
Amortization of deferred compensation		—			—			—			—			—			—		313			—			—			—			—			313
Other changes		—			—			—			12			—			—		—			(12	)		—			—			—			—
Net income		—			—			—			—			—			—		—			—			16,521			—			—			16,521
Balance at December 31, 2004		15,000			15,469			1,193,587			12			65,731			1		(848	)		108,255			(170,824	)		—			(2,540	)		(50,475	)
Accretion on preferred stock		—			498			—			—			—			—		—			(498	)		—			—			—			—
Dividends paid		—			(967	)		—			—			—			—		—			—			(107,637	)		—			—			(108,604	)
Redemption of preferred stock		(15,000	)		(15,000	)		—			—			—			—		—			—			—			—			—			(15,000	)
Forgiveness of stockholder loan		—			—			—			—			—			—		—			—			—			—			2,540			2,540
Exercise of stock options and warrants		—			—			54,852			82			—			—		—			—			—			—			—			82
Repurchase of common stock		—			—			(614	)		—			—			—		—			(7	)		—			—			—			(7	)
Cancellation of common stock by bankruptcy court		—			—			(979	)		—			—			—		—			—			—			—			—			—
Deferred compensation related to restricted stock awards		—			—			—			—			—			—		(8,940	)		8,940			—			—			—			—
Stock-based compensation and amortization of deferred compensation		—			—			—			—			—			—		9,788			—			—			—			—			9,788
Net income		—			—			—			—			—			—		—			—			33,938			—			—			33,938
		—			—			1,246,846			94			65,731			1		—			116,690			(244,523	)		—			—			(127,738	)
Successor
Issuance of common stock to SHG Holding Solutions, Inc.		—			—			1,000			—			—			—		—			222,865			—			—			—			222,865
Balance at December 31, 2005		—			—			1,000			—			—			—		—			222,865			—			—			—			222,865
Net income		—			—			—			—			—			—		—			—			7,817			—			—			7,817
Accumulated other comprehensive loss		—			—			—			—			—			—		—			—			—			(225	)		—			(225	)
Balance at June 30, 2006 (unaudited)		—		$	—			1,000		$	—			—		$	—	$	—		$	222,865		$	7,817		$	(225	)	$	—		$	230,457

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Skilled Healthcare Group, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

										Six Months Ended
	Predecessor									June 30,
	Years Ended December 31,									Predecessor			Successor
	2003			2004			2005			2005			2006
										(Unaudited)
Operating Activities
Net (loss) income	$	(13,946	)	$	16,521		$	33,938		$	32,752		$	7,817
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		8,069			8,597			9,991			4,966			7,247
Reorganization expenses		12,964			1,444			1,007			457			—
Provision for doubtful accounts		3,559			2,259			3,968			1,759			2,431
Amortization of deferred financing costs		1,550			1,155			1,657			794			1,424
Non-cash stock-based compensation		—			313			9,788			189			—
Cumulative effect of a change in accounting principle		12,261			—			1,628			—			—
(Gain) loss on sale of assets		(201	)		—			(23,892	)		(22,934	)		251
Write-off of deferred financing costs and prepayment costs related to extinguished debt		4,111			7,858			16,626			11,021			—
Forgiveness of stockholder loan		—			—			2,540			—			—
Deferred income taxes		—			—			(23,603	)		(16,819	)		(396	)
Change in fair value of interest rate hedge		1,006			926			165			152			(56	)
Amortization of discount on Senior Subordinated Notes		—			—			—			—			82
Changes in operating assets and liabilities:
Accounts receivable		(2,330	)		(7,119	)		(25,211	)		(11,546	)		(15,502	)
Other current assets		(3,287	)		(1,923	)		(6,240	)		207			1,998
Accounts payable and accrued liabilities		(35,964	)		5,745			4,689			6,320			11,143
Employee compensation and benefits		1,991			2,817			2,393			482			1,437
Other long-term liabilities		185			306			1,015			621			131
Insurance liability risks		7,557			11,272			5,173			3,717			2,183
Net cash (used in) provided by operating activities before reorganization costs		(2,475	)		50,171			15,632			12,138			20,190
Net cash paid for reorganization costs		(12,746	)		(1,813	)		(1,037	)		(487	)		—
Net cash (used in) provided by operating activities		(15,221	)		48,358			14,595			11,651			20,190
Investing activities
Principal (additions) payments on notes receivable		(1,931	)		1,134			171			462			415
Acquisition of healthcare facilities		—			(42,748	)		—			—			(34,016	)
Proceeds from disposal of property and equipment		1,732			74			41,059			36,554			—
Additions to property and equipment		(19,119	)		(8,212	)		(11,183	)		(6,185	)		(7,962	)
Changes in other assets		(6,775	)		4,522			61			(4,407	)		(4,668	)
Cash distributed related to the Onex Transaction		—			—			(253,350	)		—			—
Net cash (used in) provided by investing activities		(26,093	)		(45,230	)		(223,242	)		26,424			(46,231	)
Financing activities
Borrowings (repayments) under line of credit		16,124			—			(15,000	)		(9,000	)		—
Repayments on long-term debt and capital leases		(22,483	)		(23,299	)		(2,362	)		(12,913	)		(1,457	)
Repayments on long-term debt through refinancing		(96,084	)		(228,854	)		(122,000	)
Fees paid for early extinguishment of debt		—			(4,361	)		(6,300	)		(3,000	)		—
Proceeds from issuance of long-term debt		132,070			278,998			321,786			123,120			—
Additions to deferred financing costs of new debt		(4,314	)		(9,358	)		(21,765	)		(8,665	)		(38	)
Redemption of preferred stock		—			—			(15,732	)		(15,732	)		—
Purchase of treasury stock		—			—			(7	)		(8	)		—
Proceeds from exercise of stock options and warrants		—			—			82			—			—
Dividends paid		—			(15,000	)		(108,604	)		(108,604	)		—
Proceeds from restricted stock grant		—			4			—			—			—
Proceeds from capital contributions related to the Onex Transaction		—			—			211,300			—			—
Charge related to issuance of new common stock		1,073			—			—			—			—
Proceeds from sale of interest rate hedge		—			1,355			130			—			—
Purchase of interest rate hedge		(2,900	)		(617	)		(275	)		—			—
Net cash provided by (used in) financing activities		23,486			(1,132	)		241,253			(34,802	)		(1,495	)
(Decrease) increase in cash and cash equivalents		(17,828	)		1,996			32,606			3,273			(27,536	)
Cash and cash equivalents at beginning of year		20,498			2,670			4,666			4,666			37,272
Cash and cash equivalents at end of year	$	2,670		$	4,666		$	37,272		$	7,939		$	9,736

F-6

Skilled Healthcare Group, Inc.

Consolidated Statements of Cash Flows — (Continued)

(In Thousands)

							Six Months Ended
	Predecessor						June 30,
	Years Ended December 31,						Predecessor		Successor
	2003		2004		2005		2005		2006
							(Unaudited)
Supplemental cash flow information
Cash paid for:
Interest expense	$	58,460	$	26,836	$	26,068	$	10,024	$	10,061
Income taxes	$	838	$	1,414	$	25,222	$	15,850		—
Details of accumulated other comprehensive loss:
Change in market value of marketable securities, net of tax	$	—	$	—	$	—	$	—	$	225
Supplemental disclosure of non-cash investing and financing activities:
Reclassification of accounts receivable to notes receivable	$	4,670	$	313	$	—	$	—	$	—
Capitalized lease transactions	$	13,170	$	1,514	$	—	$	—	$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements
December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

1.   Description of Business

Current Business

Skilled Healthcare Group, Inc. (formerly known as Fountain View, Inc.), through its subsidiaries, is an operator of long-term care facilities and a provider of a wide range of post-acute care services, with a strategic emphasis on sub-acute specialty medical care. Skilled Healthcare Group, Inc. and its consolidated subsidiaries are collectively referred to as the “Company.” The Company currently operates facilities in California, Kansas, Missouri, Nevada and Texas, including 60 skilled nursing facilities (“SNFs”), that offer sub-acute care and rehabilitative and specialty medical skilled nursing care; and 12 assisted living facilities (“ALFs”) that provide room and board and social services. In addition, the Company provides a variety of ancillary services such as physical, occupational and speech therapy in Company-operated facilities and unaffiliated facilities. Furthermore, the Company owns and operates two licensed hospices providing palliative care in its California and Texas markets. The Company is also a member in a joint venture located in Texas providing institutional pharmacy services which currently serves approximately eight of the Company’s SNFs and other facilities unaffiliated with the Company. Also, in 2005, the Company sold two of its California-based institutional pharmacies, which were classified as assets held for sale at December 31, 2004 (Note 5).

Reorganization Under Chapter 11

In 2001, the Company and 22 of its subsidiaries filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division (the “Bankruptcy Court”).

Following its petition for protection under Chapter 11, the Company continued to operate its businesses as a debtor-in-possession subject to the jurisdiction of the Bankruptcy Court through August 19, 2003 (the “Effective Date”), when it emerged from bankruptcy pursuant to the terms of the Company’s Third Amended Joint Plan of Reorganization dated April 22, 2003 (the “Plan”). In connection with emerging from bankruptcy, the Company changed its name to Skilled Healthcare Group, Inc. From the date the Company filed the petition with the Bankruptcy court through December 31, 2005, the Company incurred reorganization expenses totaling approximately $32,506.

The principal components of reorganization expenses incurred are as follows:

							Six Months Ended
	Year Ended December 31,						June 30,
	2003		2004		2005		2005		2006
							(Unaudited)
Professional fees	$	7,334	$	620	$	585	$	289	$	—
Court-related services		503		157		40		20		—
Refinancing costs		1,990		49		5		5		—
Other fees		3,137		618		377		143		—
Total	$	12,964	$	1,444	$	1,007	$	457	$	—

F-8

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Matters Related to Emergence

On July 10, 2003, the Bankruptcy Court confirmed the Company’s Plan, which was approved by substantially all creditors and implemented on the Effective Date. The principal provisions of the Plan included:

•  The incurrence by the Company of (i) approximately $32,000 in indebtedness available under new Revolving Credit Facilities; (ii) approximately $23,000 under a new Secured Mezzanine Term Loan; and (iii) approximately $95,000 under a new Senior Mortgage Term Loan;

•  The satisfaction of the Company’s 111/4% Senior Subordinated Notes due 2008 (“Senior Subordinated Notes”) upon the issuance or payment by the Company to the holders of Senior Subordinated Notes on a pro rata basis of (i) approximately $106,800 of new Senior Subordinated Secured Increasing Rate Notes due 2008 (“Increasing Rate Notes”) that accrued interest at an initial rate of 9.25% and provided for annual rate increases, (ii) 58,642 shares of common stock and (iii) cash in the amount of $50,000, consisting of approximately $36,000 in outstanding interest and approximately $14,000 of principal;

•  The payment in full of amounts outstanding under the Company’s $90,000 Term Loan Facility and $30,000 Revolving Credit Facility;

•  The issuance of one share of new series A preferred stock, par value $0.01 per share (the “Series A Preferred Stock”) for each share of the Company’s existing series A preferred stock;

•  The cancellation of the Company’s series A common stock and the issuance of 1.1142 shares of new common stock for each share of cancelled series A common stock;

•  The cancellation of the Company’s series B common stock and options to purchase series C common stock, with no distribution made in respect thereof;

•  The cancellation of the Company’s series C common stock and the issuance of one share of new common stock for each share of cancelled series C common stock;

•  The cancellation of outstanding warrants to purchase series C common stock and the issuance of new warrants, on substantially the same terms, to purchase a number of shares of new common stock equal to the number of shares of series C common stock that were subject to the existing warrants so cancelled;

•  An amendment and restatement of the Company’s stockholders’ agreement;

•  The impairment of certain secured claims and the impairment of certain general unsecured claims; and

•  The restructuring of the Company’s businesses and legal structure to conform to the Company’s exit financing requirements whereby business enterprises were assumed by new subsidiary limited liability companies and existing corporations such that: (i) day-to-day operations are performed by each operating subsidiary; (ii) administrative services, such as accounting and cash management, are provided through a new subsidiary administrative services company under contracts at market rates with each of the operating subsidiaries, and (iii) payroll processing services are provided through a new subsidiary employment services company under contracts at market rates with each of the operating subsidiary employers.

F-9

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

The Onex Transaction

In October 2005, the Company entered into an agreement and plan of merger (the “Agreement”) with SHG Holding Solutions, Inc. (“Holding”) and SHG Acquisition Corp. (“Acquisition”) and Heritage Fund II LP and related investors (“Heritage”). Holding and Acquisition were formed by Onex Partners LP (“Onex”) and certain of its affiliates (collectively the “Sponsors”) for purposes of acquiring the Company. The merger was completed effective December 27, 2005 (the “Onex Transaction”). The Company’s results of operations during the period from December 28, 2005 through December 31, 2005 were not significant. Under the Agreement, Acquisition acquired substantially all of the outstanding shares of the Company, with the Company being the surviving corporation and a wholly owned subsidiary of Holding. The Onex Transaction was accounted for in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations (“SFAS No. 141”) using the purchase method of accounting and, accordingly, all assets and liabilities of the Company were recorded at their fair values as of the date of the acquisition (based upon an appraisal from a third party and also based upon certain internally-generated information) including goodwill of $396,035, representing the purchase price in excess of the fair values of the tangible and identifiable intangible assets acquired. Substantially all of the goodwill is not deductible for income tax purposes.

As a condition of the Agreement, an escrow account was established in the amount of $21,000 to settle indemnity claims for a period of four years. Of the $21,000, $6,000 is allocated for reimbursement from the escrow funds for potential tax liabilities of the Company that arose prior to the date of the Onex Transaction. As the tax liabilities recorded on the Company’s financial statements are in excess of the $6,000, the Company has recorded a receivable from the tax escrow account for $6,000, which has been classified as other current assets in the accompanying consolidated financial statements. The remaining $15,000 in escrow may be utilized to provide for any contingencies or liabilities not recorded or specifically provided for as of December 27, 2005.

Additionally, under the Agreement, the Company is required to repay to Heritage amounts previously paid by the Company to the IRS that were in excess of the amount of the 2005 tax amounts on its tax return for the period ended December 27, 2005. The Company has recorded a liability on its December 31, 2005 and June 30, 2006 (unaudited) balance sheets related to amounts owed to Heritage on this matter.

The purchase price was financed through the following sources:

Issuance of common and preferred stock for cash	$	211,300
Issuance of common and preferred stock for rollover consideration		10,065
Issuance of common and preferred stock in consideration for settlement of accrued liabilities		1,500
Total issuance of common and preferred stock		222,865
Issuance of 11% Senior Subordinated Notes due 2014		198,668
Amended First Lien Credit Agreement, assumed under Agreement		259,350
Total sources of financing	$	680,883

F-10

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

The purchase price was composed of the following:

Cash paid to stockholders, including amounts held in escrow	$	240,814
Rollover consideration		10,065
Accrued liability settled in consideration for common and preferred stock		1,500
Amended First Lien Credit Agreement, assumed under Agreement		259,350
Amounts paid to settle Second Lien Credit Agreement		110,000
Accrued interest and prepayment penalty on Second Lien Credit Agreement		4,798
Transaction costs		7,739
Deferred financing costs		11,439
Total purchase price	$	645,705
Net cash retained in successor company from the Onex Transaction	$	35,178

Financing sources exceeded the purchase price to provide for additional cash resources for planned acquisitions subsequent to the Onex Transaction.

The following table presents the purchase price allocation:

Purchase price:			$	645,705
Cash held in predecessor company	2,744
Other current assets	90,628
Property and equipment	191,151
Identifiable intangible assets	35,823
Other long-term assets	63,011
Current liabilities	(67,464	)
Other long-term liabilities	(66,223	)
Net assets acquired				249,670
Goodwill			$	396,035

F-11

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

As a result of the Onex Transaction, the financial statements were adjusted as follows:

	Prior Basis of
	Accounting,		Merger
Balance Sheet Accounts	December 27, 2005		Adjustments			As Adjusted
Cash and cash equivalents(1)	$	2,744	$	35,178		$	37,922
Other current assets(2)		6,475		6,000			12,475
Property and equipment, net(3)		190,903		248			191,151
Deferred financing costs(4)		7,112		11,439			18,551
Goodwill(5)		23,098		372,937			396,035
Other intangibles(6)		704		35,119			35,823
Accounts payable and accrued liabilities(7)		40,895		4,982			45,877
Deferred income tax liability(8)		14,538		11,718			26,256
Other long-term liabilities(9)		3,580		4,950			8,530
11% Senior Subordinated Notes due 2014(10)		—		198,668			198,668
Second Lien Credit Agreement(11)		110,000		(110,000	)		—

(1)	Cash and cash equivalents increased by $35,178 due to the financing sources exceeding the purchase price.
(2)	Other current assets increased by $6,000 for the amount held in escrow related for potential tax liabilities.
(3)	Property and equipment, net increased by $248 as a result of reflecting fixed assets at fair value at the date of the Onex Transaction.
(4)	Deferred financing costs increased by $11,439 as a result of the costs related to the financing of the 11% Senior Subordinated Notes due 2014.
(5)	Goodwill of $396,035 represents the excess of the purchase price over the fair values of the net assets acquired.
(6)	Other intangibles increased by $35,119. Other intangibles are listed in Note 4.
(7)	Accounts payable and accrued liabilities increased by $4,982 primarily from an accrual for amounts due to Heritage related to the predecessor’s December 27, 2005 tax return, partially offset by accrued interest and prepayment penalty related to the settlement of the Second Lien Credit Agreement.
(8)	Deferred income taxes increased as a result of the Onex Transaction.
(9)	Other long term liabilities increased by $4,950 to record the fair value of certain asset retirement obligations.
(10)	Concurrent with the Onex Transaction, 11% Senior Subordinated Notes due 2014 with a face value of $200,000 were issued at a discount of $1,332.
(11)	Concurrent with the Onex Transaction, the Company settled the Second Lien Credit Agreement.

Concurrent with the Onex Transaction, certain members of the Company’s senior management team and Baylor Health Care System (collectively, the Rollover Investors) made an equity investment in Holding of approximately $11,600 in cash and rollover equity, and the Sponsors made an equity investment in Holding of approximately $211,300 in cash. Immediately after the Onex Transaction, the Sponsors, its affiliates and associates and the Rollover Investors held approximately 95% and 5%, respectively, of the outstanding capital shares of Holding, not including restricted stock issued to management at the time of the Onex Transaction.

F-12

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Concurrent with the Onex Transaction, the Company assumed $200,000 of 11% Senior Subordinated Notes due 2014 (the “2014 Notes”); paid cash merger consideration of $240,814 to the Company’s existing stockholders (other than to the Rollover Investors to the extent of their rollover investment) and option holders; amended the Company’s existing First Lien Credit Agreement to provide for rollover of the existing $259,350 First Lien Credit Agreement and an increase in the revolving credit facility from $50,000 to $75,000; and repaid in full the Company’s $110,000 Second Lien Credit Agreement (Note 8).

Due to the effect of the Onex Transaction on the recorded amounts of assets, liabilities and stockholders’ equity, the Company’s financial statements prior to and subsequent to the Onex Transaction are not comparable. Periods prior to December 27, 2005 represent the accounts and activity of the predecessor company (the “Predecessor”) and from that date, the successor company (the “Successor”).

2.   Summary of Significant Accounting Policies

Basis of Presentation

Although operating under the jurisdiction of the United States Bankruptcy Court as a debtor-in-possession through August 19, 2003, the Company continued to operate and control its subsidiaries. The consolidated financial statements of the Company include the accounts of Skilled and Skilled’s consolidated subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

Unaudited Interim Results

The accompanying consolidated balance sheet as of June 30, 2006, the consolidated statements of operations and cash flows for the six months ended June 30, 2005 and June 30, 2006, and the consolidated statement of stockholders’ equity for the six month period ended June 30, 2006 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position at June 30, 2006 and results of operations and cash flows for the six month periods ended June 30, 2005 and June 30, 2006. The financial data and other information disclosed in these notes to the consolidated financial statements related to the six month periods are unaudited. The results for the six month period ended June 30, 2006 are not necessarily indicative of the results to be expected for the year ending December 31, 2006 or for any other interim period or for any other future year.

Estimates and Assumptions

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relate to revenue, allowance for doubtful accounts, patient liability claims and impairment of long-lived assets. Actual results could differ from those estimates.

Revenue and Accounts Receivables

Revenue and accounts receivables are recorded on an accrual basis as services are performed at their estimated net realizable value. The Company derives a significant amount of its revenue from funds under

F-13

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

federal Medicare and state Medicaid assistance programs, the continuation of which are dependent upon governmental policies, audit risk and potential recoupment.

The Company’s revenue is derived from services provided to patients in the following payor classes:

	Year ended December 31,
	2003					2004					2005
			Percentage					Percentage					Percentage
	Revenue		of			Revenue		of			Revenue		of
	Dollars		Revenues			Dollars		Revenues			Dollars		Revenues
Medicare	$	107,008		33.8	%	$	133,092		35.8	%	$	168,144		36.3	%
Medicaid		130,672		41.2			143,176		38.6			155,128		33.5
Subtotal Medicare and Medicaid		237,680		75.0			276,268		74.4			323,272		69.8
Managed care		20,484		6.5			24,945		6.7			33,844		7.3
Private and other		58,775		18.5			70,071		18.9			105,731		22.9
Total	$	316,939		100.0	%	$	371,284		100.0	%	$	462,847		100.0	%

	Six Months Ended June 30,
	2005					2006
			Percentage					Percentage
	Revenue		of			Revenue		of
	Dollars		Revenues			Dollars		Revenues
	(Unaudited)
Medicare	$	83,657		38.0	%	$	94,074		36.7	%
Medicaid		71,178		32.3			81,110		31.6
Subtotal Medicare and Medicaid		154,835		70.3			175,184		68.3
Managed care		16,402		7.4			20,580		8.0
Private and other		49,192		22.3			60,593		23.7
Total	$	220,429		100.0	%	$	256,357		100.0	%

Substantially all of the revenue from the Medicare program is earned by the Company’s long-term care services segment.

Risks and Uncertainties

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. Compliance with such laws and regulations can be subject to future government review and interpretation, including processing claims at lower amounts upon audit as well as significant regulatory action including fines, penalties, and exclusion from the Medicare and Medicaid programs.

Concentration of Credit Risk

The Company has significant accounts receivable balances whose collectibility is dependent on the availability of funds from certain governmental programs, primarily Medicare and Medicaid. These receivables represent the only significant concentration of credit risk for the Company. The Company does

F-14

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

not believe there are significant credit risks associated with these governmental programs. The Company believes that an adequate allowance has been recorded for the possibility of these receivables proving uncollectible, and continually monitors and adjusts these allowances as necessary.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and short-term investments with original maturities of three months or less. The Company places its cash and short-term investments with high credit quality financial institutions.

Property and Equipment

Property and equipment are stated at cost prior to the Onex Transaction. Upon the consummation of the Onex Transaction and in accordance with SFAS No. 141, property and equipment were stated at fair value. Major renovations or improvements are capitalized, whereas ordinary maintenance and repairs are expensed as incurred. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows:

Buildings and improvements	15-40 years
Leasehold improvements	Shorter of the lease term or estimated useful life, generally 5-10 years
Furniture and equipment	3-10 years.

Depreciation and amortization of property and equipment under capital leases is included in depreciation and amortization expense. For leasehold improvements, where the Company has acquired the right of first refusal to purchase or to renew the lease, amortization is based on the lesser of the estimated useful lives or the period covered by the right.

Goodwill and Intangible Assets

Goodwill is accounted for under SFAS No. 141 and represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for as purchases.

In accordance with SFAS No. 142, Goodwill and other Intangible Assets, goodwill is subject to periodic testing for impairment. Goodwill of a reporting unit is tested for impairment on an annual basis, or, if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying amount, between annual testing. There were no impairment charges recorded in 2003, 2004 or 2005 or for the six months ended June 30, 2006 (unaudited).

Intangible assets primarily consist of identified intangibles acquired as part of the Onex Transaction. Intangibles are amortized on a straight-line basis over the estimated useful life of the intangible, except for trade names, which have an indefinite life.

Deferred Financing Costs

Deferred financing costs substantially relate to the 2014 Notes and First Lien Credit Agreement (Note 8) and are being amortized over the maturity periods using an effective-interest method. At December 31, 2004 and 2005, and June 30, 2006 (unaudited), deferred financing costs, net of amortization, were approximately $8,769, $18,551 and $16,813, respectively.

F-15

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Income Taxes

The Company uses the liability method of accounting for income taxes as set forth in SFAS No. 109, Accounting for Income Taxes, (“SFAS No. 109”). Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. A valuation allowance is established for deferred tax assets unless their realization is considered more likely than not. Due primarily to the significant amount of taxable income generated by the Company in 2004 and 2005, management concluded in 2005 that it is more likely than not that the majority of the remaining net deferred tax assets will be realized; therefore, $25,177 of the valuation allowance against deferred tax assets was reversed.

Impairment of Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets other than goodwill in relation to the future undiscounted cash flows of the underlying businesses to assess recoverability of the assets. If the estimated undiscounted future cash flows are less than the carrying amount, an impairment loss, which is determined based on the difference between the fair value and the carrying value of the assets, is recognized. As of December 31, 2004 and 2005, and June 30, 2006 (unaudited) none of the Company’s long-lived assets were impaired.

Interest Rate Caps

In connection with certain of the Company’s borrowings and subsequent refinancings, the Company entered into interest rate cap agreements (“IRCAs”) with financial institutions to hedge against material and unanticipated increases in interest rates in accordance with requirements under its refinancing agreements. The Company determines the fair value of the IRCAs based on estimates obtained from a broker, and records changes in their fair value in the consolidated statements of operations. As a result of low interest rate volatility in 2003, 2004, 2005 and the first six months of 2006 (unaudited), the interest rate caps were not triggered.

Discontinued Operations

SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”), addresses the accounting for and disclosure of long-lived assets to be disposed of by sale. Under SFAS No. 144, when a long-lived asset or group of assets meets defined criteria, the long-lived assets are measured and reported at the lower of their carrying value or fair value less costs to sell, and are classified as held for sale on the consolidated balance sheet. In addition, the related operations of the long-lived assets are reported as discontinued operations in the consolidated statements of operations with all comparable periods reclassified. The Company’s 2003 consolidated statement of operations has been reclassified to reflect discontinued operations on a comparable basis to the 2004 and 2005 financial statements (Note 5).

Stock Options

On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised), Share-Based Payment (“SFAS No. 123R”), which requires measurement and recognition of compensation expense for all share-based payment awards made to employees and directors. Under SFAS No. 123R, the fair value of share-based payment awards is estimated at grant date using an option pricing model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period.

F-16

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

The Company adopted SFAS No. 123R using the modified prospective application method. Under the modified prospective application method prior periods are not revised for comparative purposes. The valuation provisions of SFAS No. 123R apply to new awards and awards that are outstanding on the adoption effective date that are subsequently modified or cancelled. The Company did not have stock options outstanding subsequent to December 27, 2005. As the Company has no options outstanding, the implementation of SFAS No. 123R had no impact on the Company’s financial statements.

Prior to the adoption of SFAS No. 123R, the Company accounted for share-based awards using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”), as allowed under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”). Under the intrinsic value method no share-based compensation cost was recognized for awards to employees or directors if the exercise price of the award was equal to the fair market value of the underlying stock on the date of grant.

In determining pro forma information regarding net income, stock options to employees and outside directors were valued using the minimum value option-pricing model with the following weighted average assumptions: expected market price of the Company’s common stock of $18.30 on the date of grant, no expected dividends, an average expected life through the option expiration dates of five years and a weighted-average risk-free interest rate of 2.5%. The minimum value method does not consider stock price volatility. For pro forma purposes, the estimated minimum value of the Company’s stock-based awards to employees and outside directors were expensed at the date of grant of the stock options that were fully vested, and expensed over the vesting period of the stock options that vest over a period of time. The results of applying SFAS No. 123 to the Company’s stock option grants to employees and outside directors on the assumptions described above approximated the Company’s reported amounts of net income (loss) for each year.

The minimum value option valuation model was developed for use in estimating the fair value of traded options that do not have vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options have characteristics significantly different from those options used in the minimum value option pricing model, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options. There were 6,475 options outstanding as of December 31, 2004 and no options outstanding as of December 31, 2005 and June 30, 2006 (unaudited).

Asset Retirement Obligations

In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (“FIN No. 47”). FIN No. 47 clarified that the term “conditional asset retirement obligation” as used in SFAS No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be in control of the entity. FIN No. 47 requires that a liability be recognized for the fair value of a legal obligation to perform asset-retirement activities that are conditional on a future event if the amount can be reasonably estimated, or where it can not, that disclosure of the liability exists, but has not been recognized and the reasons why a reasonable estimate cannot be made. FIN No. 47 became effective as of December 31, 2005.

The Company has determined that a conditional asset retirement obligation exists for asbestos remediation. Though not a current health hazard in its facilities, upon renovation the Company may be

F-17

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

required to take the appropriate remediation procedures in compliance with state law to remove the asbestos. The asbestos-containing materials includes primarily floor and ceiling tiles from the Company’s pre-1980 constructed facilities. The fair value of the conditional asset retirement obligation was determined as the present value of the estimated future cost of remediation based on an estimated expected date of remediation. This computation is based on a number of assumptions which may change in the future based on the availability of new information, technology changes, changes in costs of remediation, and other factors.

As of December 31, 2005, the Company adopted FIN No. 47 and recognized a charge of $1.6 million (net of income taxes) for the cumulative effect of change in accounting principle relating to the adoption of FIN No. 47. This charge includes the cumulative accretion of the asset retirement obligation from the estimated dates the liabilities were incurred through December 31, 2005. The charge also includes depreciation through December 31, 2005 on the related assets for the asset retirement obligations that would have been capitalized as of the dates the obligations were incurred. As of December 31, 2005 and June 30, 2006 (unaudited), the asset retirement obligation was $5.0 million and is classified as other long-term liabilities in the accompanying consolidated financial statements.

The determination of the asset retirement obligation is based upon a number of assumptions that incorporate the Company’s knowledge of the facilities, the asset life of the floor and ceiling tiles, the estimated timeframes for periodic renovations which would involve floor and ceiling tiles, the current cost for remediation of asbestos and the current technology at hand to accomplish the remediation work. These assumptions to determine the asset retirement obligation may be imprecise or may be subject to changes in the future. Any change in the assumptions can impact the value of the determined liability and impact future earnings of the Company.

Operating Leases

The Company accounts for operating leases in accordance with SFAS No. 13, Accounting for Leases, and FASB Technical Bulletin 85-3, Accounting for Operating Leases with Scheduled Rent Increases.  Accordingly, rent expense under the Company’s facilities’ and administrative offices’ operating leases is recognized on a straight-line basis over the original term of each facility’s and administrative office’s leases, inclusive of predetermined rent escalations or modifications and including any lease renewal options.

Recent Accounting Pronouncements

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of SFAS No. 109” (“FIN No. 48”). FIN No. 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. Management is in the process of evaluating the impact on the Company of adopting FIN No. 48.

3.   Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating fair value of each class of financial instruments for which it is practicable to estimate this value.

F-18

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Cash and Cash Equivalents

The carrying amounts approximate fair value because of the short maturity of these instruments.

Interest Rate Caps

The carrying amounts approximate the fair value for the Company’s interest rate caps based on an estimate obtained from a broker.

Long-Term Debt

The carrying value of the Company’s long-term debt (excluding the 2014 Notes) and its revolving credit facility is considered to approximate the fair value of such debt for all periods presented based upon the interest rates that the Company believes it can currently obtain for similar debt. The Company’s carrying value at December 31, 2005 of its 2014 Notes approximated the fair value, as the 2014 Notes were issued on December 27, 2005. The fair value of the Company’s 2014 Notes at June 30, 2006 approximated $212,000 (unaudited).

4.   Intangible Assets

Identified intangible assets are amortized over their useful lives, averaging eight years except for trade names, which have an indefinite life. Amortization expense was approximately $119 in 2004, $773 in 2005 and $2,309 for the six months ended June 30, 2006 (unaudited). Amortization of the Company’s intangible assets at December 31, 2005 is expected to be approximately $3,773 in 2006, $3,032 in 2007, $3,031 in 2008 $2,948 in 2009 and $2,271 in 2010. Identified intangible asset balances by major class, are as follows:

			Accumulated
	Cost		Amortization			Net Balance
Lease acquisition costs	$	538	$	(189	)	$	349
Covenants not-to-compete		3,500		(83	)		3,417
Balance at December 31, 2004	$	4,038	$	(272	)	$	3,766
Lease acquisition costs	$	594	$	—		$	594
Covenants not-to-compete		2,717		—			2,717
Patient lists		800		—			800
Managed care contracts		7,700		—			7,700
Trade names		17,000		—			17,000
Leasehold interest		7,012		—			7,012
Balance at December 31, 2005(1)	$	35,823	$	—		$	35,823
Lease acquisition costs	$	325	$	(27	)	$	298
Covenants not-to-compete		2,987		(350	)		2,637
Patient lists		800		(800	)		—
Managed care contracts		7,700		(770	)		6,930
Trade names		17,000		—			17,000
Leasehold interests		9,205		(362	)		8,843
Balance at June 30, 2006 (Unaudited)	$	38,017	$	(2,309	)	$	35,708

(1) In accordance with SFAS No. 141 intangible assets were recorded at fair value at December 31, 2005 due to the Onex Transaction.

F-19

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

5.   Assets Held For Sale

In the fourth quarter of 2004, the Company decided to sell certain assets comprising the operations of its two California-based institutional pharmacies (the “California Pharmacies”). On February 28, 2005, the Company entered into a definitive agreement to sell these assets and operations to Kindred Pharmacy Services, Inc. (“KPS”) for gross consideration of $31,500 in cash. The sale of the California Pharmacies was completed March 31, 2005 and there are no assets held for sale at December 31, 2005 and June 30, 2006 (unaudited).

The assets included in the sale generally included all elements of working capital of the California Pharmacies other than cash, intercompany receivables, deferred tax assets, the Company’s investment in its Texas joint venture for pharmaceutical services and certain promissory notes. The final purchase price was adjusted on a dollar-for-dollar basis for the working capital that was assumed by KPS greater than $6,258. Such determination was made sixty days after the close of the transaction, resulting in additional cash consideration of $5,055.

A summary of the assets and liabilities held for sale at December 31, 2004 follows:

Accounts receivable, net	$	9,094
Other current assets		2,579
Property and equipment, net		467
Other assets		64
Assets held for sale	$	12,204
Accounts payable and accrued liabilities	$	3,457
Employee compensation and benefits		914
Liabilities held for sale	$	4,371

The California Pharmacies’ operations classified as held for sale are reflected as discontinued operations for all periods presented in the accompanying consolidated statements of operations. A summary of discontinued operations is as follows:

										Six Months Ended
	Year Ended December 31,									June 30,
	2003			2004			2005			2005			2006
										(Unaudited)
Revenues	$	50,382		$	50,068		$	13,109		$	13,109		$	—
Expenses		(47,386	)		(45,395	)		(12,074	)		(11,941	)		—
Gain on sale of assets		201			—			22,912			22,934			—
Pre-tax income		3,197			4,673			23,947			24,102			—
Provision for income taxes		(1,231	)		(1,884	)		(9,207	)		(9,264	)		—
Discontinued operations, net of taxes	$	1,966		$	2,789		$	14,740		$	14,838		$	—

6.   Acquisitions

Effective December 31, 2004, the Company purchased substantially all of the assets and operations of 15 interrelated long-term care facilities located in Kansas generally known as Vintage Park. The facilities include eight assisted living facilities, seven skilled nursing facilities and a parcel of undeveloped land. The

F-20

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

purchase price was $42,000 (net of fees and other expenses of the transaction totaling $1,027) and generally excluded any elements of working capital other than inventory and accrued paid time off. The consideration for the purchase consisted of a $20,000 Tack-On drawn by the Company under its First Lien Credit Agreement (Note 8) and a $15,000 draw by the Company under its First Lien Credit Agreement (Note 8) with the remainder provided by cash. The Company assumed all operations of Vintage Park effective January 1, 2005. For the Tack-On, the Company incurred deferred financing fees of $500, of which $400 was paid to originate the loan.

The purchase was accounted for in accordance with SFAS No. 141 using the purchase method of accounting, which resulted in goodwill of $3,223, representing the purchase price in excess of the appraised values of the tangible and identifiable intangible assets acquired. The allocation of the purchase price to the acquired assets follows:

Purchase price		$	43,027
Land and land improvements	3,630
Buildings and leasehold improvements	32,170
Furniture and equipment	2,770
Covenant not-to-compete	1,000
Supplies inventory	234
Net assets acquired			39,804
Goodwill		$	3,223

On a pro forma basis, assuming that the transaction had occurred January 1, 2004, the Company’s consolidated results of operations would have been as follows:

	Year Ended
	December 31, 2004
Revenue	$	399,046
Income before discontinued operations, net of tax, and cumulative effect of a change in accounting principle, net of tax		14,366
Net income attributable to common stockholders	$	16,686

On March 1, 2006 (unaudited), the Company purchased two skilled nursing facilities and one skilled nursing and residential care facility in Missouri for $31,000 in cash, and on June 16, 2006 the Company purchased a long-term leasehold interest in a skilled nursing facility in Las Vegas, Nevada for $2,700 in cash. These facilities added approximately 536 beds to the Company’s operations.

7.   Business Segments

The Company has two reportable operating segments — long-term care services, which includes the operation of skilled nursing and assisted living facilities and is the most significant portion of the Company’s business, and ancillary services — which include the Company’s rehabilitation therapy and hospice businesses. The “other” category includes general and administrative items and eliminations. The Company’s reporting segments are business units that offer different services and products, and which are managed separately due to the nature of the services provided or the products sold.

At June 30, 2006 (unaudited), long-term care services were provided by 60 SNFs that offer sub-acute, rehabilitative and specialty skilled nursing care, as well as 12 ALFs that provide room and board and social

F-21

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

services. Ancillary services include rehabilitative therapy services such as physical, occupational and speech therapy provided in the Company’s facilities and in unaffiliated facilities by its subsidiary Hallmark Rehabilitative Services, Inc. Also included in the ancillary services segment is the Company’s hospice business that began providing care to patients in October 2004.

The Company evaluates performance and allocates resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. Accordingly, EBITDA is used as the primary measure of each segment’s operating results because it does not include such costs as interest expense, income taxes, and depreciation and amortization which may vary from segment to segment depending upon various factors, including the method used to finance the original purchase of a segment or the tax law of the state(s) in which a segment operates. By excluding these items, the Company is better able to evaluate operating performance of the segment by focusing on more controllable measures. General and administrative overhead is not allocated to any segment for purposes of determining segment profit or loss, and is included in the “other” category in the selected segment financial data that follows. The accounting policies of the reporting segments are the same as those described in the Summary of Significant Accounting Policies (Note 2). Intersegment sales and transfers are recorded at cost plus standard mark-up; intersegment EBITDA has been eliminated in consolidation.

F-22

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

The following table sets forth selected financial data by business segment:

	Long-Term		Ancillary
	Care Services		Services		Other			Total
Year ended December 31, 2003
Revenue from external customers	$	299,483	$	17,677	$	(221	)	$	316,939
Intersegment revenue		—		24,621		2,000			26,621
Total revenue	$	299,483	$	42,298	$	1,779		$	343,560
Segment total assets(1)	$	210,729	$	31,534	$	18,144		$	260,407
Goodwill and intangibles included in total assets	$	17,848	$	2,671	$	—		$	20,519
Segment capital expenditures(1)	$	18,072	$	290	$	757		$	19,119
EBITDA(3)	$	50,388	$	6,021	$	(26,297	)	$	30,112
Year ended December 31, 2004
Revenue from external customers	$	344,443	$	26,462	$	379		$	371,284
Intersegment revenue		—		30,304		5,940			36,244
Total revenue	$	344,443	$	56,766	$	6,319		$	407,528
Segment total assets(1)	$	251,357	$	35,761	$	21,742		$	308,860
Goodwill and intangibles included in total assets	$	23,519	$	3,345	$	—		$	26,864
Segment capital expenditures(1)	$	7,246	$	609	$	357		$	8,212
EBITDA(3)	$	47,943	$	7,979	$	(7,591	)	$	48,331
Year ended December 31, 2005
Revenue from external customers	$	418,028	$	44,519	$	300		$	462,847
Intersegment revenue		—		43,216		5,176			48,392
Total revenue	$	418,028	$	87,735	$	5,476		$	511,239
Segment total assets	$	637,870	$	135,490	$	40,560		$	813,920
Goodwill and intangibles included in total assets(2)	$	356,198	$	75,660	$	—		$	431,858
Segment capital expenditures(1)	$	9,724	$	189	$	1,270		$	11,183
EBITDA(3)	$	64,348	$	14,801	$	(34,700	)	$	44,449

F-23

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

	Long-Term		Ancillary
	Care Services		Services		Other			Total
Six months ended June 30, 2005 (Unaudited)
Revenue from external customers	$	201,330	$	18,852	$	247		$	220,429
Intersegment revenue		—		20,859		3,643			24,502
Total revenue	$	201,330	$	39,711	$	3,890		$	244,931
Segment total assets(1)	$	239,391	$	24,002	$	63,483		$	326,876
Goodwill and intangibles included in total assets	$	22,515	$	3,777		—		$	26,292
Segment capital expenditures	$	5,079	$	46	$	1,060		$	6,185
EBITDA(3)	$	26,250	$	7,111	$	(9,999	)	$	23,362
Six months ended June 30, 2006 (Unaudited)
Revenue from external customers	$	227,989	$	29,462	$	(1,094	)	$	256,357
Intersegment revenue		—		24,178		1,229			25,407
Total revenue	$	227,989	$	53,640	$	135		$	281,764
Segment total assets(1)	$	682,018	$	117,400	$	33,487		$	832,905
Goodwill and intangibles included in total assets	$	378,887	$	64,123	$	—		$	443,010
Segment capital expenditures	$	7,102	$	213	$	647		$	7,962
EBITDA(3)	$	35,328	$	8,987	$	(1,368	)	$	42,947

(1)	“Other” includes discontinued operations.
(2)	Goodwill is allocated based on the relative fair value of the assets on the date of the Onex Transaction.
(3)	EBITDA is defined as net income (loss) before discontinued operations and the cumulative effect of a change in accounting principle as well as before depreciation, amortization and interest expenses (net) and the provision (benefit) for income taxes.

Total assets by segment have not changed materially from the amounts reported at December 31, 2005.

F-24

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

8.   Debt

Long-term debt consists of the following:

	December 31,						June 30,
	2004			2005			2006
							(Unaudited)
$200,000 Senior Subordinated Notes (“2014 Notes”), interest rate 11.0%, with an original issue discount of $1,332 at December 31, 2005 and $1,250 at June 30, 2006 (unaudited), interest payable semiannually, principal due 2014, unsecured	$	—		$	198,668		$	198,750
Revolving Credit Facility, interest rate based on LIBOR plus 2.75% (7.25% at December 31, 2005 and 7.78% at June 30, 2006 (unaudited)) collateralized by real property, due 2010		15,000			—			—
First Lien Credit Agreement, interest rate based on LIBOR plus 2.75% (7.25% at December 31, 2005 and 7.78% at June 30, 2006 (unaudited)) collateralized by real property, due 2010		159,650			258,700			257,400
Second Lien Credit Agreement, interest rate based on LIBOR plus 7.50%, collateralized by real property, due 2011		100,000			—			—
Notes payable, a fixed interest rates from 6.5%, payable in monthly installments, due November 2014, collateralized by a first priority deed of trust		2,485			2,301			2,204
Present value of capital lease obligations at effective interest rates from 6.25%, collateralized by property and equipment		3,750			3,640			3,580
Total long-term debt and capital leases		280,885			463,309			461,934
Less amounts due within one year		(1,908	)		(2,918	)		(2,930	)
Long-term debt and capital leases, net of current portion	$	278,977		$	460,391		$	459,004

At June 30, 2006 (unaudited), the Company also had outstanding letters of credit totaling $4,154 as permitted under its First Lien Credit Agreement.

Senior Subordinated Notes

In June 2005, the Company completed a refinancing of its then existing debt, other than its capital leases and a note payable. Concurrently, the Company entered into an Amended and Restated First Lien Credit Agreement and a Second Lien Credit Agreement (collectively the “Lien Agreements”). The Lien Agreements are governed under an Intercreditor Agreement providing for liquidation preferences, collateral rights, lien priorities and application of payments, all favoring the First Lien Credit Agreement holders’ as well as cross-collateralization and cross-default provisions with respect to other indebtedness.

In December 2005, the Company assumed 2014 Notes in an aggregate principal amount of $200,000, with an interest rate of 11.0%. The 2014 Notes were issued at a discount of $1,332. Interest is payable semiannually in January and July of each year commencing on July 15, 2006. The 2014 Notes mature on January 15, 2014. The 2014 Notes are unsecured senior subordinated obligations and rank junior to all of the Company’s existing and future senior indebtedness, including indebtedness under the Amended First Lien Credit Agreement. The 2014 Notes are guaranteed on a senior subordinated basis by certain of the

F-25

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Company’s current and future subsidiaries (Note 14). Proceeds from the 2014 Notes were used in part to repay the Second Lien Credit facility.

Prior to January 15, 2009, the Company may on one or more occasions redeem up to 35.0% of the principal amount of the 2014 Notes with the proceeds of certain sales of the Company’s equity securities at 111.0% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption; provided that at least 65.0% of the aggregate principal amount of the 2014 Notes remains outstanding after the occurrence of each such redemption; and provided further that such redemption occurs within 90 days after the consummation of any such sale of the Company’s equity securities.

In addition, prior to January 15, 2010, the Company may redeem the 2014 Notes in whole, at a redemption price equal to 100% of the principal amount plus a premium, plus any accrued and unpaid interest to the date of redemption. The premium is calculated as the greater of: 1.0% of the principal amount of the note and the excess of the present value of all remaining interest and principal payments, calculated using the treasury rate, over the principal amount of the note on the redemption date.

On and after January 15, 2010, the Company will be entitled to redeem all or a portion of the 2014 Notes upon not less than 30 nor more than 60 days notice, at redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date if redeemed during the 12-month period commencing on January 15, 2010, 2011 and 2012 and thereafter of 105.50%, 102.75% and 100.00%, respectively. The Company may also redeem up to 35% of the outstanding principal amount at 111.00% of the aggregate principal amount redeemed using net proceeds from certain public equity offerings on or prior to January 15, 2009.

First Lien Credit Agreement and Revolving Credit Facility

The Amended and Restated First Lien Credit Agreement, as amended following the Onex Transaction, consists of a $260,000 Term Loan and a $75,000 Revolving Loan, of which $4,154 has been drawn as a letter of credit as of June 30, 2006 (unaudited) prepayable at any time, but otherwise each due in full on June 15, 2012, less principal reductions of 1% per annum required on the Term Loan, payable on a quarterly basis. The loans bear interest, at the Company’s election, either at the prime rate plus an initial margin of 1.75% or the LIBOR plus an initial margin of 2.75% and have commitment fees on the unused portions of 0.375% to 0.5%. The interest rate margins can be reduced to as low as 1.0% and 2.0% for borrowings under the prime rate and LIBOR, respectively, depending upon the Company’s leverage ratio. Furthermore, the Company has the right to increase its borrowings under the Term Loan and/or the Revolving Loan up to an aggregate amount of $150,000 (the “Tack-On”) provided that the Company is in compliance with the agreements and meets certain leverage ratio tests.

Second Lien Credit Agreement

The Second Lien Credit Agreement consisted of a $110,000 Term Loan, prepayable upon the discharge of the First Lien Credit Agreement obligations, otherwise due in full on January 31, 2011. It bore interest, at the Company’s election, either at the prime rate plus a margin of 6.5% or the LIBOR plus a margin of 7.5%. The Second Lien Credit Agreement was repaid in full in December 2005 upon completion of the Onex Transaction.

Debt Covenants

The Company must maintain compliance with certain financial covenants measured on a quarterly basis, including interest coverage and fixed charge coverage minimum ratios as well as total leverage and

F-26

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

First Lien Credit Agreement leverage maximum ratios. The covenants also include annual and lifetime limitations, including the incurrence of additional indebtedness, liens, investments in other businesses and capital expenditures. Furthermore, the Company must permanently reduce the principal amount of debt outstanding by applying the proceeds from any asset sale, insurance or condemnation payments, additional indebtedness or equity securities issuances, and 25% to 50% of excess cash flows from operations based on the leverage ratio then in effect. The Company was in compliance with its debt covenants at June 30, 2006 (unaudited).

Scheduled Maturities of Long-Term Debt

The scheduled maturities of long-term debt and capital lease obligations as of December 31, 2005 are as follows:

			Other
			Long-Term
	Capital Leases		Debt		Total
2006	$	355	$	2,797	$	3,152
2007		359		2,810		3,169
2008		363		2,824		3,187
2009		2,395		2,839		5,234
2010		216		2,855		3,071
Thereafter		865		446,876		447,741
		4,553		461,001		465,554
Less original issue discount at December 31, 2005		—		1,332		1,332
Less amount representing interest		913		—		913
	$	3,640	$	459,669	$	463,309

Interest Rate Caps

Emerging from bankruptcy on August 19, 2003, the Company entered into a $95,000 mortgage loan agreement. In compliance with the terms of that agreement, the Company concurrently entered into an interest rate cap agreement (“IRCA”) with respect to an outstanding principal amount of indebtedness equal to $85,000 and providing for a 4.5% ninety day LIBOR cap over the five year life of the mortgage loan. The Company paid $2,900 for the IRCA. That IRCA was terminated in a subsequent refinancing in which the Company was paid $1,355 for the remaining fair value of the instrument. The IRCA was terminated in July 2004.

During its refinancing in July 2004, the Company entered into a First Lien Credit and Revolving Loan Agreement. In order to comply with the terms of that agreement which required the Company to hedge the variable interest rate for at least 40% of the initial principle amount committed, the Company entered into an IRCA with respect to an outstanding principle amount of indebtedness equal to $90,000 effective on July 31, 2004 with a cap rate of 5.0% expiring three years later on July 31, 2007. The Company paid $617 for the IRCA. That IRCA was terminated in a subsequent refinancing in which the Company was paid $130 for the remaining fair value of the instrument. The IRCA was terminated in June 2005.

During its refinancing in June 2005, in compliance with the terms of the Lien Agreements which required the Company to hedge the variable interest rate for at least 40% of the initial principle amount committed, the Company entered into an IRCA with respect to an outstanding principle amount of

F-27

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

indebtedness equal to $148,000 effective on August 26, 2005 with a cap rate of 6.0% expiring three years later on August 26, 2008. The Company paid $275 for the IRCA. The impact of the change in fair value of the IRCA is reflected in the Company’s consolidated statements of operations.

9.   Other Current Assets and Other Assets

Other current assets consist of the following:

	December 31,				June 30,
	2004		2005		2006
					(Unaudited)
Receivable from escrow	$	—	$	6,000	$	6,000
Income tax receivable		—		2,980		—
Supply inventories		1,802		2,146		2,166
Other notes receivable		1,232		1,349		1,183
	$	3,034	$	12,475	$	9,349

Other assets consist of the following:

	December 31,				June 30,
	2004		2005		2006
					(Unaudited)
Equity investment in Pharmacy joint venture	$	3,812	$	3,992	$	4,024
Restricted cash		1,136		847		4,512
Investments		6,951		7,465		6,135
Deposits		3,193		2,726		4,511
	$	15,092	$	15,030	$	19,182

Equity Investment in Pharmacy Joint Venture

The Company has an investment in a joint venture which serves its pharmaceutical needs for a limited number of its Texas operations (the “Pharmacy Joint Venture”). The Pharmacy Joint Venture, a limited liability company, was formed in 1995, and is owned 50% by the Company and 50% by American Pharmaceutical Services, Inc. The Pharmacy Joint Venture operates a pharmacy in Austin, Texas and the Company pays market value for prescription drugs and receives a 50% share of the net income related to this joint venture. Based on the Company’s lack of any controlling influence, the Company’s investment in the Pharmacy Joint Venture is accounted for using the equity method of accounting.

Restricted Cash

In August 2003, the Company formed Fountain View Reinsurance, Ltd., (the “Captive”) a wholly owned off-shore captive insurance company, for the purpose of insuring its workers’ compensation liability in California. In connection with the formation of the Captive, the Company funds its estimated losses and is required to maintain certain levels of cash reserves on hand. As the use of these funds are restricted, they are classified as restricted cash in the Company’s consolidated balance sheets.

F-28

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Investments

During 2004 and 2005 and the six months ended June 30, 2006, the Company invested its excess cash reserves held by the Captive in investment grade corporate bonds. As of June 30, 2006 (unaudited), the maturities of the bonds ranged from March 2007 to October 2010. In 2004 and 2005, these securities were classified as held-to-maturity. Effective January 1, 2006, the Company transferred the securities to available-for-sale based on changes to the Company’s Captive, whereby the Captive was no longer funded through current premiums, necessitating the utilization of investments to fund current obligations. As of June 30, 2006 (unaudited), $225 of loss was recognized in other comprehensive income related to these securities.

Deposits

In the normal course of business the Company is required to post security deposits with respect to its leased properties and to many of the vendors with which it conducts business.

10.   Reversal of Charge Related to Decertification of Facility

In November 2002, a settlement was reached to provide for recertification of one the Company’s SNFs that was decertified from the Medicare and Medicaid Programs in November 1999, as a result of surveys conducted by the California Department of Health Services. The settlement provided for recovery of uncompensated care totaling approximately $3,100. A Bankruptcy Court order approving the settlement agreement was entered into December 2002. Due to the ongoing contingency related to the payment of these services the Company did not record the reversal of the charge until the cash was received. Of the amount settled, a total of approximately $300 was received in 2002 and approximately $2,734 was received in 2003. The Company did not receive any receipts in 2004, 2005 and the six months ended June 30, 2006 (unaudited).

11.   Property and Equipment

Property and equipment is comprised of the following:

	December 31,					June 30,
	2004			2005		2006
						(Unaudited)
Land and land improvements	$	23,202		$	40,523	$	42,299
Buildings and leasehold improvements		201,241			133,860		157,651
Furniture and equipment		34,869			14,769		18,077
Construction in progress		3,204			1,999		1,807
		262,516			191,151		219,834
Less amortization and accumulated depreciation		(70,119	)		—		(4,921	)
	$	192,397		$	191,151	$	214,913

F-29

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

12.   Income Taxes

The (benefit from) provision for income taxes before discontinued operations consists of the following:

	Year Ended December 31,
	2003			2004		2005
Federal:
Current	$	—		$	3,497	$	8,187
Deferred		(1,119	)		—		(18,822	)
State:
Current		(414	)		924		695
Deferred		(112	)		—		(3,108	)
	$	(1,645	)	$	4,421	$	(13,048	)

The income tax (benefit) expense applicable to continuing operations, discontinued operations and cumulative effect of a change in accounting principle is as follows:

	Year Ended December 31,
	2003			2004		2005
Income tax expense (benefit) on continuing operations	$	(1,645	)	$	4,421	$	(13,048	)
Income tax expense (benefit) on discontinued operations		1,231			1,884		9,207
Income tax (benefit) on cumulative effect of a change in accounting principle		—			—		(1,017	)
	$	(414	)	$	6,305	$	(4,858	)

A reconciliation of the income tax (benefit) provision on (losses) income before discontinued operations and cumulative effect of a change in accounting principle computed at statutory rates to the Company’s actual effective tax rate is summarized as follows:

	Year Ended December 31,
	2003			2004			2005
Federal rate (35%)	$	(1,854	)	$	6,353		$	2,722
State taxes, net of federal tax benefit		(269	)		601			1,748
Change in valuation allowance		542			(6,158	)		(25,177	)
Preferred stock, Series A dividends		—			659			—
Reorganization costs		—			2,737			3,865
Restricted stock compensation		—			110			3,551
Other, net		(64	)		119			243
	$	(1,645	)	$	4,421		$	(13,048	)

Deferred income taxes result from temporary differences between the tax basis of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Temporary differences are primarily attributable to reporting for income tax purposes, purchase accounting adjustments, allowance for doubtful accounts, accrued professional liability and other accrued expenses.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of

F-30

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

deferred tax assets is primarily dependent upon the Company generating sufficient operating income during the periods in which temporary differences become deductible. Due to the significant improvement in the Company’s operating and financial performance, management has concluded that it is more likely than not that the majority of the remaining net deferred tax assets will be realized; therefore, $25,177 of the valuation allowance against deferred tax assets was reversed in 2005. At December 31, 2005 and June 30, 2006 (unaudited), a valuation allowance of $1,336 remains and is attributable to certain local tax credit carryforwards.

In connection with the Onex Transaction in December 2005, the Company recorded net deferred tax liabilities of $11,718 related to purchase accounting adjustments.

Significant components of the Company’s deferred income tax assets and liabilities are as follows:

	December 31,
	2004						2005
	Current			Non-Current			Current			Non-Current
Deferred income tax assets:
Vacation and other accrued expenses	$	5,032		$	—		$	4,099		$	—
Allowance for doubtful accounts		3,508			—			2,317			—
Professional liability accrual		13,581			—			6,211			9,317
Fixed asset impairment		—			15,928			—			13,857
Rent accrual		—			896			—			1,320
Asset retirement obligation		—			—			—			1,066
Other		49			1,949			—			1,290
Total deferred income tax assets		22,170			18,773			12,627			26,850
Deferred income tax liabilities:
Tax over book depreciation		—			(11,160	)		—			(11,303	)
Step-up of assets acquired		—			(2,932	)		—			(15,169	)
Other		—			(338	)		(474	)		216
Total deferred income tax liabilities		—			(14,430	)		(474	)		(26,256	)
Net deferred income tax assets		22,170			4,343			12,153			594
Valuation allowance		(22,170	)		(4,343	)		—			(1,336	)
Net deferred income tax assets (liabilities)	$	—		$	—		$	12,153		$	(742	)

13.   Stockholders’ Equity

Successor Stockholders’ Equity

In connection with the Onex Transaction, Acquisition merged with and into the Company, with the Company serving as a wholly-owned subsidiary of Holding. Following the Onex Transaction, the Company has 1,000 shares of common stock outstanding.

Predecessor Stockholders’ Equity

As of March 4, 2004 the Company’s Second Amended and Restated Certificate of Incorporation (the “Amendment”) provided that the Company’s then outstanding Series A Preferred Stock was subject to

F-31

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

redemption by the Company upon the occurrence of either (i) an underwritten initial public offering of the Company’s common stock for cash pursuant to a registration statement filed under the Securities Act of 1933, as amended or (ii) the sale of the Company or its businesses as a whole in which the beneficial holders of a majority of the voting and economic interests of the Company prior to such sale are not the beneficial holders of such majority voting and economic interests or businesses thereafter the Company’s Series A Preferred Stock was subject to mandatory redemption by the Company upon the earlier of (i) an underwritten initial public offering of the Company’s common stock for cash pursuant to a registration statement filed under the Securities Act of 1933, as amended or (ii) May 1, 2010. The Series A Preferred Stock was also redeemable by the Company, out of funds legally available at the option of the Company at any time by payment of the per share Base Amount plus all unpaid dividends accrued on such shares. However, no dividends, distributions, redemption payments or other amounts could be made on or in respect of the Series A Preferred Stock unless all principal of, interest and premium on and other amounts due in respect of the Lien Agreements (Note 8) had first been paid in full.

The then outstanding Series A Preferred Stock entitled the holder to a dividend at an annual rate of 7% (prior to the Amendment it was 12%) of the Base Amount of each share of Series A Preferred Stock from the date of issuance of such share, provided that all outstanding shares of Series A Preferred Stock were deemed to have been issued as of March 27, 1998 for purposes of determining the amount of dividends that have accrued. The Base Amount was initially equal to $1,000 per share of Series A Preferred Stock, provided that any dividends that had accrued but were not paid on March 31 of each year were automatically added to the Base Amount.

The Company adopted SFAS No. 150, Accounting for Certain Financial instruments with Characteristics of Both Liabilities and Equities (“SFAS No. 150”), on July 1, 2003, and recognized interest expense of $12,261 related to the then outstanding mandatorily redeemable Series A Preferred Stock which was also reclassified as a liability. In accordance with the underlying provisions of SFAS No. 150, the charge was recorded in the consolidated financial statements as a cumulative effect of a change in accounting principle.

In July 2004, concurrent with a refinancing of the Company’s outstanding debt, the Company redeemed the cumulative $15,000 of undeclared and unpaid dividends in exchange for, among other items, removing the mandatory redemption date of May 1, 2010. The holders of the Series A Preferred Stock had no rights to convert such shares into shares of any other class or series of stock or into any other securities of, or any other interest in, the Company. In accordance with SFAS No. 150, the Series A Preferred Stock was therefore reclassified to equity in 2004. At December 31, 2004, the Base Amount of the Series A Preferred Stock was $15,000 and there was approximately $469 of cumulative and unpaid dividends on the Series A Preferred Stock. In June 2005, in connection with a refinancing of the Company’s existing debt, the Company fully redeemed the Series A preferred stock, including accumulated and unpaid dividends for $15,967.

In July 2003, pursuant to the Company’s Plan (Note 1), each share of series A common stock was cancelled and replaced with 1.1142 shares of new common stock, each share of series B common stock was cancelled for no consideration and each share of series C common stock was replaced with one share of new common stock.

Effective March 8, 2004, the Company entered into restricted stock agreements with four executive officers concurrent with the execution of amended employment agreements for each executive. Pursuant to these agreements the Company granted 70,661 shares (of which 4,930 shares were cancelled in 2004) of its restricted and non-voting Class B common stock for a purchase price of $0.05 per share, the then fair market value of the shares based upon an independent third-party appraisal, to these executives.

F-32

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

These shares of Class B common stock were restricted by certain vesting requirements, rights of the Company to repurchase the shares, and restrictions on the sale or transfer of such shares. The shares were subject to vesting as follows:

•  Subject to the executive’s continuing service with the Company, the shares would vest in full upon the occurrence of a Trigger Event, defined as any asset sale, initial public offering or stock sale of the Company (each, a “liquidity event”), providing a terminal equity value of the Company in excess of $100,000. The consummation of the Onex Transaction constituted a valid Trigger Event; and

•  If a Trigger Event had not occurred by the end of the original term of the executive’s employment agreement and such executive was still employed by the Company, 50% of his shares would vest if the executive had complied with the confidentiality and non-solicitation obligations in their employment agreement and the Company had achieved EBITDA in any one fiscal year of over $60,000.

The intrinsic value method, in accordance with APB No. 25, was used to account for the non-cash stock-based compensation associated with the restricted stock. Under this method, the Company did not recognize compensation cost upon the issuance of the restricted stock because the per share purchase price paid by each executive for the restricted shares was equal to the then per share fair market value. The Company was required to recognize deferred non-cash stock-based compensation in the period that the number of shares subject to vesting became probable and determinable, calculated as the difference between the fair value of such shares as estimated by the Company management at the end of the applicable period and the price paid for such shares by the executive. The deferred non-cash stock-based compensation was amortized over the probable vesting period, beginning with the date of issuance of the restricted stock.

In 2004, it was determined probable that 50% of the restricted shares of Class B common stock would vest at the end of the original term of each executive’s employment agreement. For 2004, deferred non-cash stock-based compensation totaling $1,161 was recorded, representing the difference between the estimated aggregate market value of the shares of restricted Class B common stock as determined by the Company management on December 31, 2004 and the aggregate price paid for such restricted shares by the executives. Related amortization of deferred non-cash stock-based compensation expense equal to $313 in 2004 and $848  in 2005 was recorded.

Upon completion of the Onex Transaction, the remainder of the restricted shares fully vested and $8,940 of non-cash stock-based compensation expense was recognized, determined as the difference between the per share price paid in the Onex Transaction and $0.05 per share (the per share price paid by the executives), multiplied by the number of restricted shares that were not previously determined to be probable to vest.

F-33

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Performance criteria, which were met as of December 31, 2005, the number of related shares of Class B common stock vested and earned, and stock-based compensation recognized during 2004 and 2005 are as follows:

	Number
	of Shares		Stock-Based Compensation
	Earned and		Recognized		Recognized
	Vested		in 2004		in 2005
Exceeding the minimum EBITDA trigger		32,865	$	313	$	848
Completion of the Onex Transaction, deemed as a Trigger Event		32,866		—		8,940
		65,731	$	313	$	9,788

Dividend Payment

In June 2005, the Company entered into a new $420,000 senior credit facility, consisting of (i) a $50,000 first lien revolving credit facility, (ii) a $260,000 first lien term loan and (iii) a $110,000 second lien term loan (see Note 8). The proceeds of this financing were used to refinance the Company’s existing indebtedness, fully redeem the Company’s then outstanding Series A Preferred Stock and pay a special dividend in the amount of $108,604 to the Company’s then existing stockholders.

Warrants

In 1998, the Company issued 71,119 warrants to purchase the Company’s Series C common stock at an exercise price of $.01 per share. The warrants were exercisable beginning April 16, 1998, and expired in April 2008. Prior to 2003, warrants to purchase 20,742 shares of the Company’s Series C common stock were exercised.

Pursuant to the Company’s Plan, the Company’s outstanding warrants to purchase 50,377 Series C common stock were cancelled and replaced with warrants to purchase an equivalent number of shares of Series A common stock. Other than the security for which the warrant may be exercised, the terms of the new warrants were substantially similar to the terms of the cancelled warrants. During 2004, no warrants were exercised.

As of December 31, 2005, there were no longer any warrants outstanding as all had been either exercised and liquidated as part of the Onex Transaction.

Stock Options

In March 2004, the Company’s Board of Directors adopted the Company’s 2004 equity incentive plan (the “2004 Plan”). The Company’s stockholders approved the 2004 Plan on March 4, 2004. The 2004 Plan provided for grants of incentive stock options, as defined in Section 422 of the Internal Revenue Code of 1986, to the Company’s employees, as well as non-qualified stock options and restricted stock to the Company’s employees, directors and consultants. The aggregate number of shares of the Company’s common stock issuable under the 2004 Plan was 20,000. In accordance with the provisions of 2004 Plan, all vested and unvested shares under stock option agreements vested were settled in cash upon the close of the Onex Transaction. The 2004 Plan was terminated as part of the Onex Transaction.

F-34

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

The following table summarizes activity in the stock option plan during the three year period ended December 31, 2005:

	Number of					Weighted Average
	Shares			Price per Share		Exercise Price
Outstanding at December 31, 2003		—		$	—	$	—
Granted		6,475		$	18.30	$	18.30
Outstanding at December 31, 2004		6,475		$	18.30	$	18.30
Granted		—			—		—
Exercised		(4,475	)	$	18.30	$	18.30
Canceled		(2,000	)	$	18.30	$	18.30
Outstanding at December 31, 2005		—		$	—	$	—
Options exercisable at end of period				$	—	$	—
Options available for grant at end of period		—

14.   Commitments and Contingencies

Leases

The Company leases certain of its facilities under noncancelable operating leases. The leases generally provide for payment of property taxes, insurance and repairs, and have rent escalation clauses, principally based upon the Consumer Price Index or other fixed annual adjustments.

The future minimum rental payments under noncancelable operating leases that have initial or remaining lease terms in excess of one year as of December 31, 2005, are as follows:

2006	$	9,359
2007		9,167
2008		8,898
2009		9,104
2010		7,942
Thereafter		34,102
	$	78,572

Litigation

As is typical in the health care industry, the Company has experienced an increasing trend in the number and severity of litigation claims asserted against it. While the Company believes that it provides quality care to its patients and is in substantial compliance with regulatory requirements, a legal judgment or adverse governmental investigation could have a material negative effect on the Company’s financial position, results of operations or cash flows.

The Company is involved in various lawsuits and claims arising in the ordinary course of business. These other matters are, in the opinion of management, immaterial both individually and in the aggregate with respect to the Company’s consolidated financial position, results of operations or cash flows.

F-35

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Under U.S. generally accepted accounting principles, the Company establishes an accrual for an estimated loss contingency when it is both probable that an asset has been impaired or that a liability has been incurred and the amount of the loss can be reasonably estimated. Given the uncertain nature of litigation generally, and the uncertainties related to the incurrence, amount and range of loss on any pending litigation, investigation or claim, the Company is currently unable to predict the ultimate outcome of any litigation, investigation or claim, determine whether a liability has been incurred or make a reasonable estimate of the liability that could result from an unfavorable outcome. While the Company believes that the liability, if any, resulting from the aggregate amount of uninsured damages for any outstanding litigation, investigation or claim will not have a material adverse effect on its consolidated financial position, results of operations or cash flows, in view of the uncertainties discussed above, it could incur charges in excess of any currently established accruals and, to the extent available, excess liability insurance. In view of the unpredictable nature of such matters, the Company cannot provide any assurances regarding the outcome of any litigation, investigation or claim to which it is a party or the impact on the Company of an adverse ruling in such matters. As additional information becomes available, the Company will assess its potential liability and revise its estimates.

Insurance

The Company maintains insurance for general and professional liability, workers’ compensation and employers’ liability, employee benefits liability, property, casualty, directors and officers, inland marine, crime, boiler and machinery, automobile, employment practices liability, earthquake and flood. The Company believes that the insurance programs are adequate and where there has been a direct transfer of risk to the insurance carrier, the Company does not recognize a liability in the consolidated financial statements.

Workers’ Compensation

The Company has maintained workers’ compensation insurance as statutorily required. Most of its commercial workers’ compensation insurance purchased is loss sensitive in nature. As a result, the Company is responsible for adverse loss development. Additionally, the Company self-insures the first unaggregated $1,000 per workers’ compensation claim in both California and Nevada.

The Company has elected to not carry workers’ compensation insurance in Texas and it may be liable for negligence claims that are asserted against it by its employees.

The Company has purchased guaranteed cost policies for Kansas and Missouri. There are no deductibles associated with these programs. The Company recognizes a liability in the consolidated financial statements for its estimated self-insured workers’ compensation risks.

General and Professional Liability

The Company’s skilled nursing services subject it to certain liability risks. Malpractice claims may be asserted against the Company if services are alleged to have resulted in patient injury or other adverse effects, the risk of which is greater for higher-acuity patients, such as those receiving specialty and sub-acute services, than for traditional long-term care patients. The Company has from time to time been subject to malpractice claims and other litigation in the ordinary course of business.

From April 10, 2001 to August 31, 2006, the Company maintained a retrospectively rated claims-made policy with a self-insured retention of $3,000 for its California and Nevada facilities and $1,000 for its

F-36

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Texas facilities. This policy had an occurrence and aggregate limit of $5,000 for professional liability and general liability losses.

Effective September 1, 2006 the Company obtained professional and general liability insurance with an occurrence limit of $2,000 per loss and $6,000 annual aggregate limit for its California, Texas and Nevada facilities. Under this program the Company retains an unaggregated $1,000 self-insured professional and general liability retention per claim.

The Kansas facilities are insured on an occurrence basis with an occurrence and aggregate coverage limit of $1,000 and $3,000, respectively, and there are no self-insurance retentions under these contracts. The Missouri facilities are underwritten on a claims made basis with no self-insured retention and have a per loss and aggregate coverage limit of $1,000 and $3,000, respectively.

In September 2004 the Company purchased a multi-year aggregate excess professional and general liability insurance policy providing an additional $10,000 of coverage for losses arising from claims in excess of $5,000 in California, Texas, Nevada, Kansas or Missouri. As of September 1, 2006 this excess coverage was modified to increase the coverage to $12,000 for losses arising from claims in excess of $3,000 which are reported since the September 1, 2006 change.

A summary of the liabilities related to insurance risks are as follows:

	December 31,
	2005						2004
	General and						General and
	Professional		Workers’				Professional		Workers’
	Liability		Compensation		Total		Liability		Compensation		Total
Reserve for insurance risks:
Current(1)	$	14,837	$	2,628	$	17,465	$	6,834	$	2,693	$	9,527
Non-current		21,689		6,725		28,414		26,862		4,316		31,178
	$	36,526	$	9,353	$	45,879	$	33,696	$	7,009	$	40,705

	June 30, 2006
	General and
	Professional		Workers’
	Liability		Compensation		Total
	(Unaudited)
Reserve for insurance risks:
Current(1)	$	14,806	$	3,439	$	18,245
Non-current		23,091		6,725		29,816
	$	37,897	$	10,164	$	48,061

(1) Included in accounts payable and accrued liabilities.

F-37

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

Hallmark Indemnification

Hallmark Investment Group, Inc. (Hallmark), the Company’s wholly-owned rehabilitation services subsidiary, provides physical, occupational and speech therapy services to various unaffiliated skilled nursing facilities. These skilled nursing facilities are reimbursed for these services from the Medicare Program and other third party payors. Hallmark has indemnified these skilled nursing facilities from certain disallowances of these services.

Financial Guarantees

Substantially all of the subsidiaries of the Company guarantee the 2014 Notes, the Amended and Restated First Lien Credit Agreement and the Revolving Loan. The guarantees provided by the subsidiaries are full and unconditional, and joint and several. Other subsidiaries of the Company that are not guarantors are considered minor.

15.   Material Transactions with Related Entities

Leased Facilities

The Company’s former Chief Executive Officer and director, and his wife, a former Executive Vice President of the Company, own the real estate for four of the Company’s leased facilities. Such real estate has not been included in the consolidated financial statements for any of the years presented herein. Lease payments to these related parties under operating leases for these facilities were $1,900 in 2003, $2,100 in 2004, and $2,200 in 2005. Upon the completion of the Onex Transaction, these individuals no longer have any related party interests in the Company.

Notes Receivable

The Company had a limited recourse promissory note receivable from a member of its Board of Directors in the amount of approximately $2,540 with an interest rate of 5.7%. The note was due on the earlier of April 15, 2007 or the sale by the Director of 20,000 shares of the Company’s common stock pledged as security for the note. The Company had recourse for payment up to $1,000 of the principal amount of the note. Prior to the Onex Transaction, the Company’s Board of Directors approved the forgiveness of the limited recourse note receivable in consideration for prior service provided by the Director.

16.   Defined Contribution Plan

As of December 31, 2005, the Company sponsored a defined contribution plan covering substantially all employees who meet certain eligibility requirements. The Company does not contribute to this plan.

F-38

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

17.   Quarterly Financial Information (Unaudited)

The following table summarizes unaudited quarterly financial data for the years ended December 31, 2005 and 2004 and for the six months ended June 30, 2006:

	Quarter Ended
	March 31			June 30
	(unaudited)
2006:
Revenue	$	125,186		$	131,171
Total expense		108,002			113,603
Income from continuing operations before other income (expenses) and provision for income taxes		17,184			17,568
Other income (expenses), net		(10,481	)		(10,782	)
Income before provision for income taxes		6,703			6,786
Provision for income taxes		2,601			3,071
Net income	$	4,102		$	3,715

	Quarter Ended
	March			June			September			December
	31			30			30			31
	(unaudited)
2005:
Revenue	$	108,936		$	111,493		$	122,206		$	120,212
Total expenses		95,126			96,190			103,230			116,272
Income from continuing operations before other income (expenses), (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		13,810			15,303			18,976			3,940
Other income (expenses), net		(4,928	)		(16,550	)		(7,370	)		(15,403	)
Income (loss) before (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		8,882			(1,247	)		11,606			(11,463	)
(Benefit from) provision for income taxes		(7,375	)		(2,904	)		3,875			(6,644	)
Discontinued operations, net of tax		12,569			2,269			(50	)		(48	)
Cumulative effect of a change in accounting principle, net of tax		—			—			—			(1,628	)
Net income (loss)	$	28,826		$	3,926		$	7,681		$	(6,495	)

F-39

Skilled Healthcare Group, Inc.

Notes to Consolidated Financial Statements — (Continued)

December 31, 2005 and June 30, 2006 (unaudited)

(Dollars in Thousands, Except Per Share Data)

	Quarter Ended
	March			June			September			December
	31			30			30			31
	(unaudited)
2004:
Revenue	$	90,678		$	90,480		$	93,137		$	96,989
Total expenses		78,926			78,312			81,526			84,259
Income from continuing operations before other income (expenses), provision for income taxes and discontinued operations		11,752			12,168			11,611			12,730
Other income (expenses), net		(8,289	)		(6,755	)		(10,491	)		(4,573	)
Income before provision for income taxes and discontinued operations		3,463			5,413			1,120			8,157
Provision for income taxes		1,004			2,270			522			625
Discontinued operations, net of tax		898			908			651			332
Net income	$	3,357		$	4,051		$	1,249		$	7,864

F-40

Offer to Exchange

$200,000,000 principal amount of its 11% Senior Subordinated Notes due 2014,

which have been registered under the Securities Act,

for any and all of our outstanding 11% Senior Subordinated Notes due 2014

PROSPECTUS

Until          , 2006, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscriptions.

PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.  Indemnification of Directors and Officers

The following is a summary of the statutes, charter and bylaw provisions or other arrangements under which the Registrant’s directors and officers are insured or indemnified against liability in their capacities as such. All the directors and officers of the Registrant are covered by insurance policies maintained and held in effect by Skilled Healthcare Group, Inc. against certain liabilities for actions taken in their capacities as such.

Skilled Healthcare Group, Inc. is incorporated under the laws of the State of Delaware.

Applicable Sections of Delaware General Corporation Law.

Section 102 of the Delaware General Corporation Law, or DGCL, provides that the corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director: (i) For any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for unlawful payment of dividend or unlawful stock purchase or redemption; or (iv) for any transaction from which the director derived an improper personal benefit.

Section 145 of the DGCL, provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.

Section 145 also provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of Delaware or such other court shall deem proper.

To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith; provided that indemnification provided for by Section 145 or granted pursuant thereto shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and a Delaware corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of

II-1

another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.

Certificate of Incorporation Provisions on Indemnification.

The ninth section of the Second Amended and Restated Certificate of Incorporation of Skilled Healthcare Group, Inc. provides that the personal liability of a director of the corporation shall be eliminated to the fullest extent permitted by Section 102(b)(7) of the DGCL. In addition the Registrant has the power to indemnify any person serving as a director, officer or agent of the corporation to the fullest extent permitted by Section 145 of the DGCL. The right to indemnification includes the right to be paid by the corporation the expenses incurred in defending or otherwise participating in a proceeding upon receipt of an undertaking by the person to repay the expenses if it is ultimately determined that the person is not entitled to indemnification.

The foregoing statements are subject to the detailed provisions of the DGCL and to the applicable provisions of the registrant’s charter and bylaws.

Item 21.   Exhibits.

(a) The following exhibits are filed with this Registration Statement.

Number			Description
	2	.1	Agreement of and Plan of Merger, dated as of October 22, 2005, among SHG Acquisition Corp., SHG Holding Solutions, Inc. and Skilled Healthcare Group, Inc.
	2	.2	Amendment No. 1 to Agreement and Plan of Merger, dated October 22, 2005 by and between SHG Holding Solutions, Inc. and Skilled Healthcare Group, Inc.
	2	.3	Asset Purchase Agreement, dated as of January 31, 2006, by and among Skilled Healthcare Group, Inc., each of the entities listed on Schedule 2.1 thereto, M. Terence Reardon and M. Sue Reardon, individually and as Trustees of the M. Terence Reardon Trust U.T.A. dated 6/26/03, and M. Sue Reardon and M. Terence Reardon, as Trustees of the M. Sue Reardon Trust U.T.A. dated 6/26/03.
	3	.1	Second Amended and Restated Certificate of Incorporation of Skilled Healthcare Group, Inc.
	3	.2	Bylaws of Skilled Healthcare Group, Inc.
	3	.3	Certificate of Incorporation of Hallmark Investment Group, Inc., as amended
	3	.4	Bylaws of Hallmark Investment Group, Inc.
	3	.5	Certificate of Incorporation of Summit Care Corporation
	3	.6	Bylaws of Summit Care Corporation
	3	.7	Certificate of Incorporation of Summit Care Pharmacy, Inc.
	3	.8	Bylaws of Summit Care Pharmacy, Inc.
	3	.9	Certificate of Conversion and Certificate of Formation of Alexandria Care Center, LLC
	3	.10	Limited Liability Company Operating Agreement of Alexandria Care Center, LLC
	3	.11	Certificate of Formation of Alta Care Center, LLC
	3	.12	Limited Liability Company Operating Agreement of Alta Care Center, LLC
	3	.13	Certificate of Formation of Anaheim Terrace Care Center, LLC
	3	.14	Limited Liability Company Operating Agreement of Anaheim Terrace Care Center, LLC
	3	.15	Certificate of Formation of Baldwin Healthcare and Rehabilitation Center, LLC
	3	.16	Limited Liability Company Operating Agreement of Baldwin Healthcare and Rehabilitation Center, LLC
	3	.17	Certificate of Formation of Bay Crest Care Center, LLC
	3	.18	Limited Liability Company Operating Agreement of Bay Crest Care Center, LLC

II-2

Number			Description
	3	.19	Certificate of Formation of Briarcliff Nursing and Rehabilitation Center GP, LLC
	3	.20	Second Amended and Restated Limited Liability Company Operating Agreement of Briarcliff Nursing and Rehabilitation Center GP, LLC
	3	.21	Certificate of Conversion and Certificate of Formation of Brier Oak on Sunset, LLC
	3	.22	Limited Liability Company Operating Agreement of Brier Oak on Sunset, LLC
	3	.23	Certificate of Formation of Carehouse Healthcare Center, LLC
	3	.24	Second Amended and Restated Limited Liability Company Operating Agreement of Carehouse Healthcare Center, LLC
	3	.25	Certificate of Formation of Carson Senior Assisted Living, LLC
	3	.26	Limited Liability Company Operating Agreement of Carson Senior Assisted Living, LLC
	3	.27	Certificate of Formation of Clairmont Beaumont GP, LLC
	3	.28	Second Amended and Restated Limited Liability Company Operating Agreement of Clairmont Beaumont GP, LLC
	3	.29	Certificate of Formation of Clairmont Longview GP, LLC
	3	.30	Second Amended and Restated Limited Liability Company Operating Agreement of Clairmont Longview GP, LLC
	3	.31	Certificate of Formation of Colonial New Braunfels GP, LLC
	3	.32	Second Amended and Restated Limited Liability Company Operating Agreement of Colonial New Braunfels GP, LLC
	3	.33	Certificate of Formation of Colonial Tyler GP, LLC
	3	.34	Second Amended and Restated Limited Liability Company Operating Agreement of Colonial Tyler GP, LLC
	3	.35	Certificate of Formation of Comanche Nursing Center GP, LLC
	3	.36	Second Amended and Restated Limited Liability Company Operating Agreement of Comanche Nursing Center GP, LLC
	3	.37	Certificate of Formation of Coronado Nursing Center GP, LLC
	3	.38	Second Amended and Restated Limited Liability Company Operating Agreement of Coronado Nursing Center GP, LLC
	3	.39	Certificate of Formation of Devonshire Care Center, LLC
	3	.40	Second Amended and Restated Limited Liability Company Operating Agreement of Devonshire Care Center, LLC
	3	.41	Certificate of Conversion and Certificate of Formation of Elmcrest Care Center, LLC
	3	.42	Limited Liability Company Operating Agreement of Elmcrest Care Center, LLC
	3	.43	Certificate of Formation of Eureka Healthcare and Rehabilitation Center, LLC
	3	.44	Limited Liability Company Operating Agreement of Eureka Healthcare and Rehabilitation Center, LLC
	3	.45	Certificate of Formation of Flatonia Oak Manor GP, LLC
	3	.46	Second Amended and Restated Limited Liability Company Operating Agreement of Flatonia Oak Manor GP, LLC
	3	.47	Certificate of Formation of Fountain Care Center, LLC
	3	.48	Second Amended and Restated Limited Liability Company Operating Agreement of Fountain Care Center, LLC
	3	.49	Certificate of Formation of Fountain Senior Assisted Living, LLC
	3	.50	Second Amended and Restated Limited Liability Company Operating Agreement of Fountain Senior Assisted Living, LLC
	3	.51	Certificate of Conversion and Certificate of Formation of Fountain View Subacute and Nursing Center, LLC

II-3

Number			Description
	3	.52	Limited Liability Company Operating Agreement of Fountain View Subacute and Nursing Center, LLC
	3	.53	Operating Agreement of Granada Healthcare and Rehabilitation Center, LLC
	3	.54	Limited Liability Company Certificate of Formation of Granada Healthcare and Rehabilitation Center, LLC
	3	.55	Certificate of Formation of Guadalupe Valley Nursing Center GP, LLC
	3	.56	Second Amended and Restated Limited Liability Company Operating Agreement of Guadalupe Valley Nursing Center GP, LLC
	3	.57	Certificate of Formation of Hallettsville Rehabilitation GP, LLC
	3	.58	Second Amended and Restated Limited Liability Company Operating Agreement of Hallettsville Rehabilitation GP, LLC
	3	.59	Certificate of Formation of Hallmark Rehabilitation GP, LLC
	3	.60	Amended and Restated Limited Liability Company Operating Agreement of Hallmark Rehabilitation GP, LLC
	3	.61	Certificate of Conversion and Certificate of Formation of Hancock Park Rehabilitation Center, LLC
	3	.62	Limited Liability Company Operating Agreement of Hancock Park Rehabilitation Center, LLC
	3	.63	Certificate of Conversion and Certificate of Formation of Hancock Park Senior Assisted Living, LLC
	3	.64	Limited Liability Company Operating Agreement of Hancock Park Senior Assisted Living, LLC
	3	.65	Certificate of Formation of Hemet Senior Assisted Living, LLC
	3	.66	Limited Liability Company Operating Agreement of Hemet Senior Assisted Living, LLC
	3	.67	Certificate of Formation of Highland Healthcare and Rehabilitation Center, LLC
	3	.68	Limited Liability Company Operating Agreement of Highland Healthcare and Rehabilitation Center, LLC
	3	.69	Certificate of Formation of Hospice Care Investments, LLC
	3	.70	Limited Liability Company Operating Agreement of Hospice Care Investments, LLC
	3	.71	Certificate of Formation of Hospice Care of the West, LLC
	3	.72	Limited Liability Company Operating Agreement of Hospice Care of the West, LLC
	3	.73	Certificate of Formation of Hospitality Nursing GP, LLC
	3	.74	Second Amended and Restated Limited Liability Company Operating Agreement of Hospitality Nursing GP, LLC
	3	.75	Amended and Restated Certificate of Formation of Leasehold Resource Group, LLC
	3	.76	Second Amended and Restated Limited Liability Company Operating Agreement of Leasehold Resource Group, LLC
	3	.77	Certificate of Formation of Live Oak Nursing Center GP, LLC
	3	.78	Second Amended and Restated Limited Liability Company Operating Agreement of Live Oak Nursing Center GP, LLC
	3	.79	Certificate of Formation of Louisburg Healthcare and Rehabilitation Center, LLC
	3	.80	Limited Liability Company Operating Agreement of Louisburg Healthcare and Rehabilitation Center, LLC
	3	.81	Certificate of Formation of Montebello Care Center, LLC
	3	.82	Limited Liability Company Operating Agreement of Montebello Care Center, LLC
	3	.83	Certificate of Formation of Monument Rehabilitation GP, LLC
	3	.84	Second Amended and Restated Limited Liability Company Operating Agreement of Monument Rehabilitation GP, LLC
	3	.85	Certificate of Formation of Oak Crest Nursing Center GP, LLC

II-4

Number			Description
	3	.86	Second Amended and Restated Limited Liability Company Operating Agreement of Oak Crest Nursing Center GP, LLC
	3	.87	Certificate of Formation of Oakland Manor GP, LLC
	3	.88	Second Amended and Restated Limited Liability Company Operating Agreement of Oakland Manor GP, LLC
	3	.89	Certificate of Formation of Pacific Healthcare and Rehabilitation Center, LLC
	3	.90	Limited Liability Company Operating Agreement of Pacific Healthcare and Rehabilitation Center, LLC
	3	.91	Certificate of Formation of Richmond Healthcare and Rehabilitation Center, LLC
	3	.92	Limited Liability Company Operating Agreement of Richmond Healthcare and Rehabilitation Center, LLC
	3	.93	Certificate of Conversion and Certificate of Formation of Rio Hondo Subacute and Nursing Center, LLC
	3	.94	Limited Liability Company Operating Agreement of Rio Hondo Subacute and Nursing Center, LLC
	3	.95	Certificate of Formation of Rossville Healthcare and Rehabilitation Center, LLC
	3	.96	Limited Liability Company Operating Agreement of Rossville Healthcare and Rehabilitation Center, LLC
	3	.97	Certificate of Formation of Royalwood Care Center, LLC
	3	.98	Limited Liability Company Operating Agreement of Royalwood Care Center, LLC
	3	.99	Certificate of Formation of Seaview Healthcare and Rehabilitation Center, LLC
	3	.100	Limited Liability Company Operating Agreement of Seaview Healthcare and Rehabilitation Center, LLC
	3	.101	Certificate of Formation of Sharon Care Center, LLC
	3	.102	Limited Liability Company Operating Agreement of Sharon Care Center, LLC
	3	.103	Certificate of Formation of Shawnee Gardens Healthcare and Rehabilitation Center, LLC
	3	.104	Limited Liability Company Operating Agreement of Shawnee Gardens Healthcare and Rehabilitation Center, LLC
	3	.105	Certificate of Formation of Skilled Healthcare, LLC
	3	.106	Limited Liability Company Operating Agreement of Skilled Healthcare, LLC
	3	.107	Certificate of Formation of Southwest Payroll Services, LLC
	3	.108	Limited Liability Company Operating Agreement of Southwest Payroll Services, LLC
	3	.109	Certificate of Formation of Southwood Care Center GP, LLC
	3	.110	Second Amended and Restated Limited Liability Company Operating Agreement of Southwood Care Center GP, LLC
	3	.111	Certificate of Formation of Spring Senior Assisted Living, LLC
	3	.112	Second Amended and Restated Limited Liability Company Operating Agreement of Spring Senior Assisted Living, LLC
	3	.113	Certificate of Formation of St. Elizabeth Healthcare and Rehabilitation Center, LLC
	3	.114	Limited Liability Company Operating Agreement of St. Elizabeth Healthcare and Rehabilitation Center, LLC
	3	.115	Certificate of Formation of St. Luke Healthcare and Rehabilitation Center, LLC
	3	.116	Limited Liability Company Operating Agreement of St. Luke Healthcare and Rehabilitation Center, LLC
	3	.117	Certificate of Conversion and Certificate of Formation of Sycamore Park Care Center, LLC
	3	.118	Limited Liability Company Operating Agreement of Sycamore Park Care Center, LLC
	3	.119	Certificate of Formation of Texas Cityview Care Center GP, LLC

II-5

Number			Description
	3	.120	Second Amended and Restated Limited Liability Company Operating Agreement of Texas Cityview Care Center GP, LLC
	3	.121	Certificate of Formation of Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
	3	.122	Second Amended and Restated Limited Liability Company Operating Agreement of Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
	3	.123	Certificate of Formation of The Clairmont Tyler GP, LLC
	3	.124	Second Amended and Restated Limited Liability Company Operating Agreement of The Clairmont Tyler GP, LLC
	3	.125	Certificate of Formation of The Earlwood, LLC
	3	.126	Second Amended and Restated Limited Liability Company Operating Agreement of The Earlwood, LLC
	3	.127	Certificate of Formation of The Heights of Summerlin, LLC, as amended
	3	.128	Limited Liability Company Operating Agreement of The Heights of Summerlin, LLC
	3	.129	Certificate of Formation of The Woodlands Healthcare Center GP, LLC
	3	.130	Second Amended and Restated Limited Liability Company Operating Agreement of The Woodlands Healthcare Center GP, LLC
	3	.131	Certificate of Formation of Town and Country Manor GP, LLC
	3	.132	Second Amended and Restated Limited Liability Company Operating Agreement of Town and Country Manor GP, LLC
	3	.133	Certificate of Formation of Travelmark Staffing, LLC
	3	.134	First Amended Limited Liability Company Operating Agreement of Travelmark Staffing, LLC
	3	.135	Certificate of Formation of Valley Healthcare Center, LLC
	3	.136	Second Amended and Restated Limited Liability Company Operating Agreement of Valley Healthcare Center, LLC
	3	.137	Certificate of Formation of Villa Maria Healthcare Center, LLC
	3	.138	Second Amended and Restated Limited Liability Company Operating Agreement of Villa Maria Healthcare Center, LLC
	3	.139	Certificate of Formation of Vintage Park at Atchison, LLC
	3	.140	Limited Liability Company Operating Agreement of Vintage Park at Atchison, LLC
	3	.141	Certificate of Formation of Vintage Park at Baldwin City, LLC
	3	.142	Limited Liability Company Operating Agreement of Vintage Park at Baldwin City, LLC
	3	.143	Certificate of Formation of Vintage Park at Gardner, LLC
	3	.144	Limited Liability Company Operating Agreement of Vintage Park at Gardner, LLC
	3	.145	Certificate of Formation of Vintage Park at Lenexa, LLC
	3	.146	Limited Liability Company Operating Agreement of Vintage Park at Lenexa, LLC
	3	.147	Certificate of Formation of Vintage Park at Louisburg, LLC
	3	.148	Limited Liability Company Operating Agreement of Vintage Park at Louisburg, LLC
	3	.149	Certificate of Formation of Vintage Park at Osawatomie, LLC
	3	.150	Limited Liability Company Operating Agreement of Vintage Park at Osawatomie, LLC
	3	.151	Certificate of Formation of Vintage Park at Ottawa, LLC
	3	.152	Limited Liability Company Operating Agreement of Vintage Park at Ottawa, LLC
	3	.153	Certificate of Formation of Vintage Park at Paola, LLC
	3	.154	Limited Liability Company Operating Agreement of Vintage Park at Paola, LLC
	3	.155	Certificate of Formation of Vintage Park at Stanley, LLC
	3	.156	Limited Liability Company Operating Agreement of Vintage Park at Stanley, LLC
	3	.157	Certificate of Formation of Wathena Healthcare and Rehabilitation Center, LLC

II-6

Number			Description
	3	.158	Limited Liability Company Operating Agreement of Wathena Healthcare and Rehabilitation Center, LLC
	3	.159	Certificate of Formation of West Side Campus of Care GP, LLC
	3	.160	Second Amended and Restated Limited Liability Company Operating Agreement of West Side Campus of Care GP, LLC
	3	.161	Certificate of Formation of Willow Creek Healthcare Center, LLC
	3	.162	Second Amended and Restated Limited Liability Company Operating Agreement of Willow Creek Healthcare Center, LLC
	3	.163	Certificate of Formation of Woodland Care Center, LLC
	3	.164	Limited Liability Company Operating Agreement of Woodland Care Center, LLC
	3	.165	Certificate of Limited Partnership of Briarcliff Nursing and Rehabilitation Center, LP
	3	.166	Second Amended and Restated Limited Partnership Agreement of Briarcliff Nursing and Rehabilitation Center, LP
	3	.167	Certificate of Limited Partnership of Clairmont Beaumont, LP
	3	.168	Second Amended and Restated Limited Partnership Agreement of Clairmont Beaumont, LP
	3	.169	Certificate of Limited Partnership of Clairmont Longview, LP
	3	.170	Second Amended and Restated Limited Partnership Agreement of Clairmont Longview, LP
	3	.171	Certificate of Limited Partnership of Colonial New Braunfels Care Center, LP
	3	.172	Second Amended and Restated Limited Partnership Agreement of Colonial New Braunfels Care Center, LP
	3	.173	Certificate of Limited Partnership of Colonial Tyler Care Center, LP
	3	.174	Second Amended and Restated Limited Partnership Agreement of Colonial Tyler Care Center, LP
	3	.175	Certificate of Limited Partnership of Comanche Nursing Center, LP
	3	.176	Second Amended and Restated Limited Partnership Agreement of Comanche Nursing Center, LP
	3	.177	Certificate of Limited Partnership of Coronado Nursing Center, LP
	3	.178	Second Amended and Restated Limited Partnership Agreement of Coronado Nursing Center, LP
	3	.179	Certificate of Limited Partnership of Flatonia Oak Manor, LP
	3	.180	Second Amended and Restated Limited Partnership Agreement of Flatonia Oak Manor, LP
	3	.181	Certificate of Limited Partnership of Guadalupe Valley Nursing Center, LP
	3	.182	Second Amended and Restated Limited Partnership Agreement of Guadalupe Valley Nursing Center, LP
	3	.183	Certificate of Limited Partnership of Hallettsville Rehabilitation and Nursing Center, LP
	3	.184	Second Amended and Restated Limited Partnership Agreement of Hallettsville Rehabilitation and Nursing Center, LP
	3	.185	Certificate of Limited Partnership of Hallmark Rehabilitation, LP
	*3	.186	Amended and Restated Limited Partnership Agreement of Hallmark Rehabilitation, LP
	3	.187	Certificate of Limited Partnership of Hospice of the West, LP
	3	.188	Limited Partnership Agreement of Hospice of the West, LP
	3	.189	Certificate of Limited Partnership of Hospitality Nursing and Rehabilitation Center, LP
	3	.190	Second Amended and Restated Limited Partnership Agreement of Hospitality Nursing and Rehabilitation Center, LP
	3	.191	Certificate of Limited Partnership of Live Oak Nursing Center, LP
	3	.192	Second Amended and Restated Limited Partnership Agreement of Live Oak Nursing Center, LP
	3	.193	Certificate of Limited Partnership of Monument Rehabilitation and Nursing Center, LP

II-7

Number			Description
	3	.194	Second Amended and Restated Limited Partnership Agreement of Monument Rehabilitation and Nursing Center, LP
	3	.195	Certificate of Limited Partnership of Oak Crest Nursing Center, LP
	3	.196	Second Amended and Restated Limited Partnership Agreement of Oak Crest Nursing Center, LP
	3	.197	Certificate of Limited Partnership of Oakland Manor Nursing Center, LP
	3	.198	Second Amended and Restated Limited Partnership Agreement of Oakland Manor Nursing Center, LP
	3	.199	Certificate of Limited Partnership of SHG Resources, LP
	3	.200	Second Amended and Restated Limited Partnership Agreement of SHG Resources, LP
	3	.201	Certificate of Limited Partnership of Southwood Care Center, LP
	3	.202	Second Amended and Restated Limited Partnership Agreement of Southwood Care Center, LP
	3	.203	Certificate of Limited Partnership of Texas Cityview Care Center, LP
	3	.204	Second Amended and Restated Limited Partnership Agreement of Texas Cityview Care Center, LP
	3	.205	Certificate of Limited Partnership of Texas Heritage Oaks Nursing and Rehabilitation Center, LP
	3	.206	Second Amended and Restated Limited Partnership Agreement of Texas Heritage Oaks Nursing and Rehabilitation Center, LP
	3	.207	Certificate of Limited Partnership of The Clairmont Tyler, LP
	3	.208	Second Amended and Restated Limited Partnership Agreement of The Clairmont Tyler, LP
	3	.209	Certificate of Limited Partnership of The Woodlands Healthcare Center, LP
	3	.210	Second Amended and Restated Limited Partnership Agreement of The Woodlands Healthcare Center, LP
	3	.211	Certificate of Limited Partnership of Town and Country Manor, LP
	3	.212	Second Amended and Restated Limited Partnership Agreement of Town and Country Manor, LP
	3	.213	Certificate of Limited Partnership of Travelmark Staffing, LP
	3	.214	Limited Partnership Agreement of Travelmark Staffing, LP
	3	.215	Certificate of Limited Partnership of West Side Campus of Care, LP
	3	.216	Second Amended and Restated Limited Partnership Agreement of West Side Campus of Care, LP
	3	.217	Certificate of Formation of Carmel Hills Healthcare and Rehabilitation Center, LLC
	3	.218	Limited Liability Company Operating Agreement of Carmel Hills Healthcare and Rehabilitation Center, LLC
	3	.219	Certificate of Formation of East Walnut Property, LLC
	3	.220	Limited Liability Company Operating Agreement of East Walnut Property, LLC
	3	.221	Certificate of Formation of Glen Hendren Property, LLC
	3	.222	Limited Liability Company Operating Agreement of Glen Hendren Property, LLC
	3	.223	Certificate of Formation of Holmesdale Healthcare and Rehabilitation Center, LLC
	3	.224	Limited Liability Company Operating Agreement of Holmesdale Healthcare and Rehabilitation Center, LLC
	3	.225	Certificate of Formation of Holmesdale Property, LLC
	3	.226	Limited Liability Company Operating Agreement of Holmesdale Property, LLC
	3	.227	Certificate of Formation of Liberty Terrace Healthcare and Rehabilitation Center, LLC
	3	.228	Limited Liability Company Operating Agreement of Liberty Terrace Healthcare and Rehabilitation Center, LLC

II-8

Number			Description
	3	.229	Certificate of Formation of Preferred Design, LLC
	3	.230	Limited Liability Company Operating Agreement of Preferred Design, LLC
	3	.231	Certificate of Formation of St. Joseph Transitional Rehabilitation Center, LLC, as amended
	3	.232	Limited Liability Company Operating Agreement of St. Joseph Transitional Rehabilitation Center, LLC
	4	.1	Indenture with respect to the 11% Senior Subordinated Notes due 2014, dated as of December 27, 2005, among SHG Acquisition Corp., Wells Fargo Bank, N.A., as trustee and Skilled Healthcare Group, Inc.
	4	.2	Form of 11% Senior Subordinated Notes due 2014 (included in exhibit 4.1)
	4	.3	Registration Rights Agreement, dated as of December 27, 2005, among SHG Acquisition Corp., Skilled Healthcare Group, Inc., each of the registrant’s subsidiaries included in exhibit 21.1 and Credit Suisse First Boston LLC.
	5	.1	Opinion of Latham & Watkins LLP regarding the validity of the 11% exchange notes due 2014.
	10	.1	SHG Holdings, Inc. Restricted Stock Plan.
	10	.2	Form of Restricted Stock Agreement.
	10	.3	Second Amended and Restated First Lien Credit Agreement, dated December 27, 2005, by and among the Company, SHG Holding, the financial institutions party thereto, and Credit Suisse, Cayman Islands, as administrative agent and collateral agent.
	10	.4	Employment agreement, dated December 27, 2005, by and between the Company and Boyd Hendrickson.
	10	.5	Employment agreement, dated December 27, 2005, by and between the Company and Jose Lynch.
	10	.6	Employment agreement, dated December 27, 2005, by and between the Company and John E. King.
	10	.7	Employment agreement, dated December 27, 2005, by and between the Company and Roland G. Rapp.
	10	.8	Employment agreement dated December 27, 2005, by and between the Company and Mark Wortley.
	10	.9	Trigger Event Cash Bonus Agreement, dated April 30, 2005, by and between Skilled Healthcare Group, Inc. and John E. King.
	10	.10	Trigger Event Cash Bonus Agreement, dated April 30, 2005, by and between Skilled Healthcare Group, Inc. and Mark Wortley.
	10	.11	Lease, dated as of August 26, 2002, by and between CT Foothill 10/241, LLC, and Fountain View, Inc. and amendments thereto.
	12	.1	Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
	21	.1	Subsidiaries of Skilled Healthcare Group, Inc.
	23	.1	Consent of Latham & Watkins LLP (included in Exhibit 5.1)
	23	.2	Consent of Independent Registered Public Accounting Firm
	24	.1	Power of Attorney (included in the signature pages to this Registration Statement).
	*25	.1	Statement of Eligibility of Trustee with respect to the Indenture with respect to the 11% Senior Subordinated Notes due 2014.

(b) Financial Statement Schedules

 *  To be filed by amendment.

II-9

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(Deducted from the assets to which they apply)
(Dollars in Thousands)

SCHEDULE II — VALUATION ACCOUNTS

SKILLED HEALTHCARE GROUP, INC.
December 31, 2005

	Balance at		Charged to						Balance at
	Beginning		Costs and						End of
	of Period		Expenses			Deductions(1)			Period
	(Dollars in thousands)
Accounts receivable
Six Months Ended June 30, 2006 (Unaudited)	$	5,678	$	2,862		$	(1,468	)	$	7,072
Year Ended December 31, 2005	$	4,750	$	3,968		$	(3,040	)	$	5,678
Year Ended December 31, 2004	$	10,033	$	2,259		$	(7,542	)	$	4,750
Year Ended December 31, 2003	$	17,315	$	3,559		$	(10,841	)	$	10,033
Notes receivable
Six Months Ended June 30, 2006 (Unaudited)	$	631	$	—		$	—		$	631
Year Ended December 31, 2005	$	1,288	$	(500	)	$	(157	)	$	631
Year Ended December 31, 2004	$	1,847	$	—		$	(559	)	$	1,288
Year Ended December 31, 2003	$	2,035	$	(188	)	$	—		$	1,847

(1) Uncollectible accounts written off, net of recoveries

Item 22.   Undertakings.

The undersigned registrants hereby undertake:

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by final adjudication of such issue.

The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-10

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Skilled Healthcare Group, Inc.

By:  /s/  Boyd Hendrickson

Name: Boyd Hendrickson

Title:  Chief Executive Officer

Power Of Attorney

Each person whose signature appears below constitutes and appoints Boyd Hendrickson, Jose Lynch and Roland Rapp and each of them individually, as attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendment to this registration statement (including post-effective amendments and registration statements filed pursuant to Rule 462 and otherwise), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or each of them individually, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.

SIGNATURE	TITLE	Date
/s/  Boyd Hendrickson Boyd Hendrickson	Chief Executive Officer (Principal Executive Officer) and Chairman of the Board	October 6, 2006
/s/  Jose Lynch Jose Lynch	President and Chief Operating Officer and Director	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial Officer)	October 6, 2006
/s/  Peter A. Reynolds Peter A. Reynolds	Senior Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)	October 6, 2006
/s/  Robert M. Le Blanc Robert M. Le Blanc	Director	October 6, 2006
/s/  Michael E. Boxer Michael E. Boxer	Director	October 6, 2006

II-11

SIGNATURE	TITLE	Date
/s/  John M. Miller, V John M. Miller, V	Director	October 6, 2006
Glenn S. Schafer	Director	October  , 2006
/s/  William Scott William Scott	Director	October 6, 2006

II-12

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the county of Orange, State of California, on the 6th day of October, 2006.

Hallmark Investment Group, Inc.

By:  /s/  BOYD HENDRICKSON

Name: BOYD HENDRICKSON

Title:  Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.

SIGNATURE	TITLE	Date
/s/  Boyd Hendrickson Boyd Hendrickson	Chief Executive Officer (Principal Executive Officer) and Director	October 6, 2006
/s/  Mark Wortley Mark Wortley	President and Director	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Director	October 6, 2006
/s/  Roland Rapp Roland Rapp	Director	October 6, 2006

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Summit Care Corporation

By:  /s/  BOYD HENDRICKSON

Name: BOYD HENDRICKSON

Title:  Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.

SIGNATURE	Title	Date
/s/  Boyd Hendrickson Boyd Hendrickson	Chief Executive Officer (Principal Executive Officer) and Director	October 6, 2006
/s/  Jose Lynch Jose Lynch	President and Director	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Director	October 6, 2006
/s/  Roland Rapp Roland Rapp	Director	October 6, 2006

II-14

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Summit Care Pharmacy, Inc.

By:  /s/  Boyd Hendrickson

Name: BOYD HENDRICKSON

Title:  Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.

Signature	Title	Date
/s/  Boyd Hendrickson Boyd Hendrickson	Chief Executive Officer (Principal Executive Officer) and Director	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Director	October 6, 2006
/s/  Jose Lynch Jose Lynch	Director	October 6, 2006
/s/  Roland Rapp Roland Rapp	Director	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, each Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Alexandria Care Center, LLC
Alta Care Center, LLC
Anaheim Terrace Care Center, LLC
Baldwin Healthcare and Rehabilitation Center, LLC
Bay Crest Care Center, LLC
Briarcliff Nursing and Rehabilitation Center GP, LLC
Brier Oak on Sunset, LLC
Carehouse Healthcare Center, LLC
Carmel Hills Healthcare and Rehabilitation Center, LLC
Carson Senior Assisted Living, LLC
Clairmont Beaumont GP, LLC
Clairmont Longview GP, LLC
Colonial New Braunfels GP, LLC

II-15

Colonial Tyler GP, LLC
Comanche Nursing Center GP, LLC
Coronado Nursing Center GP, LLC
Devonshire Care Center, LLC
East Walnut Property, LLC
Elmcrest Care Center, LLC
Eureka Healthcare and Rehabilitation Center, LLC
Flatonia Oak Manor GP, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC
Fountain View Subacute and Nursing Center, LLC
Glen Hendren Property, LLC
Granada Healthcare and Rehabilitation Center, LLC
Guadalupe Valley Nursing Center GP, LLC
Hallettsville Rehabilitation GP, LLC
Hancock Park Rehabilitation Center, LLC
Hancock Park Senior Assisted Living, LLC
Hemet Senior Assisted Living, LLC
Highland Healthcare and Rehabilitation Center, LLC
Holmesdale Healthcare and Rehabilitation Center, LLC
Holmesdale Property, LLC
Hospitality Nursing GP, LLC
Leasehold Resource Group, LLC
Liberty Terrace Healthcare and Rehabilitation Center, LLC
Live Oak Nursing Center GP, LLC
Louisburg Healthcare and Rehabilitation Center, LLC
Montebello Care Center, LLC
Monument Rehabilitation GP, LLC
Oak Crest Nursing Center GP, LLC
Oakland Manor GP, LLC
Pacific Healthcare and Rehabilitation Center, LLC
Richmond Healthcare and Rehabilitation Center, LLC
Rio Hondo Subacute and Nursing Center, LLC
Rossville Healthcare and Rehabilitation Center, LLC
Royalwood Care Center, LLC
Seaview Healthcare and Rehabilitation Center, LLC
Sharon Care Center, LLC
Shawnee Gardens Healthcare and Rehabilitation Center, LLC
Southwest Payroll Services, LLC
Southwood Care Center GP, LLC
Spring Senior Assisted Living, LLC
St. Elizabeth Healthcare and Rehabilitation Center, LLC
St. Joseph Transitional Rehabilitation Center, LLC
St. Luke Healthcare and Rehabilitation Center, LLC
Sycamore Park Care Center, LLC
Texas Cityview Care Center GP, LLC
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
The Clairmont Tyler GP, LLC
The Earlwood, LLC
The Heights of Summerlin, LLC
The Woodlands Healthcare Center GP, LLC
Town and Country Manor GP, LLC
Valley Healthcare Center, LLC

II-16

Villa Maria Healthcare Center, LLC
Vintage Park at Atchison, LLC
Vintage Park at Baldwin City, LLC
Vintage Park at Gardner, LLC
Vintage Park at Lenexa, LLC
Vintage Park at Louisburg, LLC
Vintage Park at Osawatomie, LLC
Vintage Park at Ottawa, LLC
Vintage Park at Paola, LLC
Vintage Park at Stanley, LLC
Wathena Healthcare and Rehabilitation Center, LLC
West Side Campus of Care GP, LLC
Willow Creek Healthcare Center, LLC
Woodland Care Center, LLC

By:  /s/  JOSE LYNCH

Name: JOSE LYNCH

Title:  President and Chief Executive Officer

of each of the foregoing entities

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of each of the above-referenced registrants and on the dates indicated.

Signature	Title	Date
/s/  Jose Lynch Jose Lynch	President and Chief Executive Officer (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6^{th day of October, 2006.}

^{Hallmark Rehabilitation GP, LLC}

^{By:  /s/  Mark Wortley}

^{Name: MARK WORTLEY}

^{Title:  President and Chief Executive Officer}

II-17

^{Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.}

Signature	Title	Date
/s/  Mark Wortley Mark Wortley	President and Chief Executive Officer (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Boyd Hendrickson Boyd Hendrickson	Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, each Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Hospice Care Investments, LLC
Hospice Care of the West, LLC
Preferred Design, LLC
Travelmark Staffing, LLC

By:  /s/  MARK WORTLEY

Name: MARK WORTLEY

Title:  President and Chief Executive Officer of each of the foregoing entities

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of each of the above-referenced registrants and on the dates indicated.

Signature	Title	Date
/s/  Mark Wortley Mark Wortley	President and Chief Executive Officer (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Skilled Healthcare, LLC

By:  /s/  Jose Lynch

Name: JOSE LYNCH

Title:  President

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrant and on the dates indicated.

Signature	Title	Date
/s/  Jose Lynch Jose Lynch	President (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, each Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Briarcliff Nursing and Rehabilitation Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Comanche Nursing Center, LP
Coronado Nursing Center, LP
Flatonia Oak Manor, LP
Guadalupe Valley Nursing Center, LP
Hallettsville Rehabilitation and Nursing Center, LP
Hospitality Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP
Oakland Manor Nursing Center, LP
SHG Resources, LP
Southwood Care Center, LP

II-19

Texas Cityview Care Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
The Clairmont Tyler, LP
The Woodlands Healthcare Center, LP
Town and Country Manor, LP
West Side Campus of Care, LP

By:  /s/  JOSE LYNCH

Name: JOSE LYNCH

Title:  President and Chief Executive Officer of the respective General Partners of each of the foregoing entities

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of each of the above-referenced registrants and on the dates indicated.

Signature	Title	Date
/s/  Jose Lynch Jose Lynch	President and Chief Executive Officer (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Financial and Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Hallmark Rehabilitation, LP

By:  /s/  MARK WORTLEY

Name: MARK WORTLEY

Title:  Chief Executive Officer of the General Partner of the foregoing entity

II-20

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of the above-referenced registrants and on the dates indicated.

Signature	Title	Date
/s/  Mark Wortley Mark Wortley	President and Chief Executive Officer (Principal Executive Officer) and Manager	October 6, 2006
/s/  John King John King	Chief Financial Officer (Principal Accounting Officer), Treasurer and Manager	October 6, 2006
/s/  Boyd Hendrickson Boyd Hendrickson	Manager	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, each Registrant listed below has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Orange, State of California, on the 6th day of October, 2006.

Hospice of the West, LP

Travelmark Staffing, LP

By:  /s/  MARK WORTLEY

Name: MARK WORTLEY

Title:  President and Chief Executive Officer of the General Partners of each of the foregoing entities

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities of each of the above-referenced registrants and on the dates indicated.

Signature	Title	Date
/s/  Mark Wortley Mark Wortley	Chief Executive Officer (Principal Executive Officer) and Director	October 6, 2006
/s/  John King John King	Chief Financial Officer, (Principal Accounting Officer), Treasurer and Director	October 6, 2006
/s/  Roland Rapp Roland Rapp	Manager	October 6, 2006

II-21

EXHIBIT INDEX

Number			Description
	2	.1	Agreement of and Plan of Merger, dated as of October 22, 2005, among SHG Acquisition Corp., SHG Holding Solutions, Inc. and Skilled Healthcare Group, Inc.
	2	.2	Amendment No. 1 to Agreement and Plan of Merger, dated October 22, 2005 by and between SHG Holding Solutions, Inc. and Skilled Healthcare Group, Inc.
	2	.3	Asset Purchase Agreement, dated as of January 31, 2006, by and among Skilled Healthcare Group, Inc., each of the entities listed on Schedule 2.1 thereto, M. Terence Reardon and M. Sue Reardon, individually and as Trustees of the M. Terence Reardon Trust U.T.A. dated 6/26/03, and M. Sue Reardon and M. Terence Reardon, as Trustees of the M. Sue Reardon Trust U.T.A. dated 6/26/03.
	3	.1	Second Amended and Restated Certificate of Incorporation of Skilled Healthcare Group, Inc.
	3	.2	Bylaws of Skilled Healthcare Group, Inc.
	3	.3	Certificate of Incorporation of Hallmark Investment Group, Inc., as amended
	3	.4	Bylaws of Hallmark Investment Group, Inc.
	3	.5	Certificate of Incorporation of Summit Care Corporation
	3	.6	Bylaws of Summit Care Corporation
	3	.7	Certificate of Incorporation of Summit Care Pharmacy, Inc.
	3	.8	Bylaws of Summit Care Pharmacy, Inc.
	3	.9	Certificate of Conversion and Certificate of Formation of Alexandria Care Center, LLC
	3	.10	Limited Liability Company Operating Agreement of Alexandria Care Center, LLC
	3	.11	Certificate of Formation of Alta Care Center, LLC
	3	.12	Limited Liability Company Operating Agreement of Alta Care Center, LLC
	3	.13	Certificate of Formation of Anaheim Terrace Care Center, LLC
	3	.14	Limited Liability Company Operating Agreement of Anaheim Terrace Care Center, LLC
	3	.15	Certificate of Formation of Baldwin Healthcare and Rehabilitation Center, LLC
	3	.16	Limited Liability Company Operating Agreement of Baldwin Healthcare and Rehabilitation Center, LLC
	3	.17	Certificate of Formation of Bay Crest Care Center, LLC
	3	.18	Limited Liability Company Operating Agreement of Bay Crest Care Center, LLC
	3	.19	Certificate of Formation of Briarcliff Nursing and Rehabilitation Center GP, LLC
	3	.20	Second Amended and Restated Limited Liability Company Operating Agreement of Briarcliff Nursing and Rehabilitation Center GP, LLC
	3	.21	Certificate of Conversion and Certificate of Formation of Brier Oak on Sunset, LLC
	3	.22	Limited Liability Company Operating Agreement of Brier Oak on Sunset, LLC
	3	.23	Certificate of Formation of Carehouse Healthcare Center, LLC
	3	.24	Second Amended and Restated Limited Liability Company Operating Agreement of Carehouse Healthcare Center, LLC
	3	.25	Certificate of Formation of Carson Senior Assisted Living, LLC
	3	.26	Limited Liability Company Operating Agreement of Carson Senior Assisted Living, LLC
	3	.27	Certificate of Formation of Clairmont Beaumont GP, LLC
	3	.28	Second Amended and Restated Limited Liability Company Operating Agreement of Clairmont Beaumont GP, LLC
	3	.29	Certificate of Formation of Clairmont Longview GP, LLC
	3	.30	Second Amended and Restated Limited Liability Company Operating Agreement of Clairmont Longview GP, LLC
	3	.31	Certificate of Formation of Colonial New Braunfels GP, LLC
	3	.32	Second Amended and Restated Limited Liability Company Operating Agreement of Colonial New Braunfels GP, LLC

Number			Description
	3	.33	Certificate of Formation of Colonial Tyler GP, LLC
	3	.34	Second Amended and Restated Limited Liability Company Operating Agreement of Colonial Tyler GP, LLC
	3	.35	Certificate of Formation of Comanche Nursing Center GP, LLC
	3	.36	Second Amended and Restated Limited Liability Company Operating Agreement of Comanche Nursing Center GP, LLC
	3	.37	Certificate of Formation of Coronado Nursing Center GP, LLC
	3	.38	Second Amended and Restated Limited Liability Company Operating Agreement of Coronado Nursing Center GP, LLC
	3	.39	Certificate of Formation of Devonshire Care Center, LLC
	3	.40	Second Amended and Restated Limited Liability Company Operating Agreement of Devonshire Care Center, LLC
	3	.41	Certificate of Conversion and Certificate of Formation of Elmcrest Care Center, LLC
	3	.42	Limited Liability Company Operating Agreement of Elmcrest Care Center, LLC
	3	.43	Certificate of Formation of Eureka Healthcare and Rehabilitation Center, LLC
	3	.44	Limited Liability Company Operating Agreement of Eureka Healthcare and Rehabilitation Center, LLC
	3	.45	Certificate of Formation of Flatonia Oak Manor GP, LLC
	3	.46	Second Amended and Restated Limited Liability Company Operating Agreement of Flatonia Oak Manor GP, LLC
	3	.47	Certificate of Formation of Fountain Care Center, LLC
	3	.48	Second Amended and Restated Limited Liability Company Operating Agreement of Fountain Care Center, LLC
	3	.49	Certificate of Formation of Fountain Senior Assisted Living, LLC
	3	.50	Second Amended and Restated Limited Liability Company Operating Agreement of Fountain Senior Assisted Living, LLC
	3	.51	Certificate of Conversion and Certificate of Formation of Fountain View Subacute and Nursing Center, LLC
	3	.52	Limited Liability Company Operating Agreement of Fountain View Subacute and Nursing Center, LLC
	3	.53	Certificate of Formation of Granada Healthcare and Rehabilitation Center, LLC
	3	.54	Limited Liability Company Operating Agreement of Granada Healthcare and Rehabilitation Center, LLC
	3	.55	Certificate of Formation of Guadalupe Valley Nursing Center GP, LLC
	3	.56	Second Amended and Restated Limited Liability Company Operating Agreement of Guadalupe Valley Nursing Center GP, LLC
	3	.57	Certificate of Formation of Hallettsville Rehabilitation GP, LLC
	3	.58	Second Amended and Restated Limited Liability Company Operating Agreement of Hallettsville Rehabilitation GP, LLC
	3	.59	Certificate of Formation of Hallmark Rehabilitation GP, LLC
	3	.60	Amended and Restated Limited Liability Company Operating Agreement of Hallmark Rehabilitation GP, LLC
	3	.61	Certificate of Conversion and Certificate of Formation of Hancock Park Rehabilitation Center, LLC
	3	.62	Limited Liability Company Operating Agreement of Hancock Park Rehabilitation Center, LLC
	3	.63	Certificate of Conversion and Certificate of Formation of Hancock Park Senior Assisted Living, LLC
	3	.64	Limited Liability Company Operating Agreement of Hancock Park Senior Assisted Living, LLC
	3	.65	Certificate of Formation of Hemet Senior Assisted Living, LLC

Number			Description
	3	.66	Limited Liability Company Operating Agreement of Hemet Senior Assisted Living, LLC
	3	.67	Certificate of Formation of Highland Healthcare and Rehabilitation Center, LLC
	3	.68	Limited Liability Company Operating Agreement of Highland Healthcare and Rehabilitation Center, LLC
	3	.69	Certificate of Formation of Hospice Care Investments, LLC
	3	.70	Limited Liability Company Operating Agreement of Hospice Care Investments, LLC
	3	.71	Certificate of Formation of Hospice Care of the West, LLC
	3	.72	Limited Liability Company Operating Agreement of Hospice Care of the West, LLC
	3	.73	Certificate of Formation of Hospitality Nursing GP, LLC
	3	.74	Second Amended and Restated Limited Liability Company Operating Agreement of Hospitality Nursing GP, LLC
	3	.75	Amended and Restated Certificate of Formation of Leasehold Resource Group, LLC
	3	.76	Second Amended and Restated Limited Liability Company Operating Agreement of Leasehold Resource Group, LLC
	3	.77	Certificate of Formation of Live Oak Nursing Center GP, LLC
	3	.78	Second Amended and Restated Limited Liability Company Operating Agreement of Live Oak Nursing Center GP, LLC
	3	.79	Certificate of Formation of Louisburg Healthcare and Rehabilitation Center, LLC
	3	.80	Limited Liability Company Operating Agreement of Louisburg Healthcare and Rehabilitation Center, LLC
	3	.81	Certificate of Formation of Montebello Care Center, LLC
	3	.82	Limited Liability Company Operating Agreement of Montebello Care Center, LLC
	3	.83	Certificate of Formation of Monument Rehabilitation GP, LLC
	3	.84	Second Amended and Restated Limited Liability Company Operating Agreement of Monument Rehabilitation GP, LLC
	3	.85	Certificate of Formation of Oak Crest Nursing Center GP, LLC
	3	.86	Second Amended and Restated Limited Liability Company Operating Agreement of Oak Crest Nursing Center GP, LLC
	3	.87	Certificate of Formation of Oakland Manor GP, LLC
	3	.88	Second Amended and Restated Limited Liability Company Operating Agreement of Oakland Manor GP, LLC
	3	.89	Certificate of Formation of Pacific Healthcare and Rehabilitation Center, LLC
	3	.90	Limited Liability Company Operating Agreement of Pacific Healthcare and Rehabilitation Center, LLC
	3	.91	Certificate of Formation of Richmond Healthcare and Rehabilitation Center, LLC
	3	.92	Limited Liability Company Operating Agreement of Richmond Healthcare and Rehabilitation Center, LLC
	3	.93	Certificate of Conversion and Certificate of Formation of Rio Hondo Subacute and Nursing Center, LLC
	3	.94	Limited Liability Company Operating Agreement of Rio Hondo Subacute and Nursing Center, LLC
	3	.95	Certificate of Formation of Rossville Healthcare and Rehabilitation Center, LLC
	3	.96	Limited Liability Company Operating Agreement of Rossville Healthcare and Rehabilitation Center, LLC
	3	.97	Certificate of Formation of Royalwood Care Center, LLC
	3	.98	Limited Liability Company Operating Agreement of Royalwood Care Center, LLC
	3	.99	Certificate of Formation of Seaview Healthcare and Rehabilitation Center, LLC
	3	.100	Limited Liability Company Operating Agreement of Seaview Healthcare and Rehabilitation Center, LLC

Number			Description
	3	.101	Certificate of Formation of Sharon Care Center, LLC
	3	.102	Limited Liability Company Operating Agreement of Sharon Care Center, LLC
	3	.103	Certificate of Formation of Shawnee Gardens Healthcare and Rehabilitation Center, LLC
	3	.104	Limited Liability Company Operating Agreement of Shawnee Gardens Healthcare and Rehabilitation Center, LLC
	3	.105	Certificate of Formation of Skilled Healthcare, LLC
	3	.106	Limited Liability Company Operating Agreement of Skilled Healthcare, LLC
	3	.107	Certificate of Formation of Southwest Payroll Services, LLC
	3	.108	Limited Liability Company Operating Agreement of Southwest Payroll Services, LLC
	3	.109	Certificate of Formation of Southwood Care Center GP, LLC
	3	.110	Second Amended and Restated Limited Liability Company Operating Agreement of Southwood Care Center GP, LLC
	3	.111	Certificate of Formation of Spring Senior Assisted Living, LLC
	3	.112	Second Amended and Restated Limited Liability Company Operating Agreement of Spring Senior Assisted Living, LLC
	3	.113	Certificate of Formation of St. Elizabeth Healthcare and Rehabilitation Center, LLC
	3	.114	Limited Liability Company Operating Agreement of St. Elizabeth Healthcare and Rehabilitation Center, LLC
	3	.115	Certificate of Formation of St. Luke Healthcare and Rehabilitation Center, LLC
	3	.116	Limited Liability Company Operating Agreement of St. Luke Healthcare and Rehabilitation Center, LLC
	3	.117	Certificate of Conversion and Certificate of Formation of Sycamore Park Care Center, LLC
	3	.118	Limited Liability Company Operating Agreement of Sycamore Park Care Center, LLC
	3	.119	Certificate of Formation of Texas Cityview Care Center GP, LLC
	3	.120	Second Amended and Restated Limited Liability Company Operating Agreement of Texas Cityview Care Center GP, LLC
	3	.121	Certificate of Formation of Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
	3	.122	Second Amended and Restated Limited Liability Company Operating Agreement of Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
	3	.123	Certificate of Formation of The Clairmont Tyler GP, LLC
	3	.124	Second Amended and Restated Limited Liability Company Operating Agreement of The Clairmont Tyler GP, LLC
	3	.125	Certificate of Formation of The Earlwood, LLC
	3	.126	Second Amended and Restated Limited Liability Company Operating Agreement of The Earlwood, LLC
	3	.127	Certificate of Formation of The Heights of Summerlin, LLC, as amended
	3	.128	Limited Liability Company Operating Agreement of The Heights of Summerlin, LLC
	3	.129	Certificate of Formation of The Woodlands Healthcare Center GP, LLC
	3	.130	Second Amended and Restated Limited Liability Company Operating Agreement of The Woodlands Healthcare Center GP, LLC
	3	.131	Certificate of Formation of Town and Country Manor GP, LLC
	3	.132	Second Amended and Restated Limited Liability Company Operating Agreement of Town and Country Manor GP, LLC
	3	.133	Certificate of Formation of Travelmark Staffing, LLC
	3	.134	First Amended Limited Liability Company Operating Agreement of Travelmark Staffing, LLC
	3	.135	Certificate of Formation of Valley Healthcare Center, LLC
	3	.136	Second Amended and Restated Limited Liability Company Operating Agreement of Valley Healthcare Center, LLC

Number			Description
	3	.137	Certificate of Formation of Villa Maria Healthcare Center, LLC
	3	.138	Second Amended and Restated Limited Liability Company Operating Agreement of Villa Maria Healthcare Center, LLC
	3	.139	Certificate of Formation of Vintage Park at Atchison, LLC
	3	.140	Limited Liability Company Operating Agreement of Vintage Park at Atchison, LLC
	3	.141	Certificate of Formation of Vintage Park at Baldwin City, LLC
	3	.142	Limited Liability Company Operating Agreement of Vintage Park at Baldwin City, LLC
	3	.143	Certificate of Formation of Vintage Park at Gardner, LLC
	3	.144	Limited Liability Company Operating Agreement of Vintage Park at Gardner, LLC
	3	.145	Certificate of Formation of Vintage Park at Lenexa, LLC
	3	.146	Limited Liability Company Operating Agreement of Vintage Park at Lenexa, LLC
	3	.147	Certificate of Formation of Vintage Park at Louisburg, LLC
	3	.148	Limited Liability Company Operating Agreement of Vintage Park at Louisburg, LLC
	3	.149	Certificate of Formation of Vintage Park at Osawatomie, LLC
	3	.150	Limited Liability Company Operating Agreement of Vintage Park at Osawatomie, LLC
	3	.151	Certificate of Formation of Vintage Park at Ottawa, LLC
	3	.152	Limited Liability Company Operating Agreement of Vintage Park at Ottawa, LLC
	3	.153	Certificate of Formation of Vintage Park at Paola, LLC
	3	.154	Limited Liability Company Operating Agreement of Vintage Park at Paola, LLC
	3	.155	Certificate of Formation of Vintage Park at Stanley, LLC
	3	.156	Limited Liability Company Operating Agreement of Vintage Park at Stanley, LLC
	3	.157	Certificate of Formation of Wathena Healthcare and Rehabilitation Center, LLC
	3	.158	Limited Liability Company Operating Agreement of Wathena Healthcare and Rehabilitation Center, LLC
	3	.159	Certificate of Formation of West Side Campus of Care GP, LLC
	3	.160	Second Amended and Restated Limited Liability Company Operating Agreement of West Side Campus of Care GP, LLC
	3	.161	Certificate of Formation of Willow Creek Healthcare Center, LLC
	3	.162	Second Amended and Restated Limited Liability Company Operating Agreement of Willow Creek Healthcare Center, LLC
	3	.163	Certificate of Formation of Woodland Care Center, LLC
	3	.164	Limited Liability Company Operating Agreement of Woodland Care Center, LLC
	3	.165	Certificate of Limited Partnership of Briarcliff Nursing and Rehabilitation Center, LP
	3	.166	Second Amended and Restated Limited Partnership Agreement of Briarcliff Nursing and Rehabilitation Center, LP
	3	.167	Certificate of Limited Partnership of Clairmont Beaumont, LP
	3	.168	Second Amended and Restated Limited Partnership Agreement of Clairmont Beaumont, LP
	3	.169	Certificate of Limited Partnership of Clairmont Longview, LP
	3	.170	Second Amended and Restated Limited Partnership Agreement of Clairmont Longview, LP
	3	.171	Certificate of Limited Partnership of Colonial New Braunfels Care Center, LP
	3	.172	Second Amended and Restated Limited Partnership Agreement of Colonial New Braunfels Care Center, LP
	3	.173	Certificate of Limited Partnership of Colonial Tyler Care Center, LP
	3	.174	Second Amended and Restated Limited Partnership Agreement of Colonial Tyler Care Center, LP
	3	.175	Certificate of Limited Partnership of Comanche Nursing Center, LP
	3	.176	Second Amended and Restated Limited Partnership Agreement of Comanche Nursing Center, LP

Number			Description
	3	.177	Certificate of Limited Partnership of Coronado Nursing Center, LP
	3	.178	Second Amended and Restated Limited Partnership Agreement of Coronado Nursing Center, LP
	3	.179	Certificate of Limited Partnership of Flatonia Oak Manor, LP
	3	.180	Second Amended and Restated Limited Partnership Agreement of Flatonia Oak Manor, LP
	3	.181	Certificate of Limited Partnership of Guadalupe Valley Nursing Center, LP
	3	.182	Second Amended and Restated Limited Partnership Agreement of Guadalupe Valley Nursing Center, LP
	3	.183	Certificate of Limited Partnership of Hallettsville Rehabilitation and Nursing Center, LP
	3	.184	Second Amended and Restated Limited Partnership Agreement of Hallettsville Rehabilitation and Nursing Center, LP
	3	.185	Certificate of Limited Partnership of Hallmark Rehabilitation, LP
	3	.186	Amended and Restated Limited Partnership Agreement of Hallmark Rehabilitation, LP*
	3	.187	Certificate of Limited Partnership of Hospice of the West, LP
	3	.188	Limited Partnership Agreement of Hospice of the West, LP
	3	.189	Certificate of Limited Partnership of Hospitality Nursing and Rehabilitation Center, LP
	3	.190	Second Amended and Restated Limited Partnership Agreement of Hospitality Nursing and Rehabilitation Center, LP
	3	.191	Certificate of Limited Partnership of Live Oak Nursing Center, LP
	3	.192	Second Amended and Restated Limited Partnership Agreement of Live Oak Nursing Center, LP
	3	.193	Certificate of Limited Partnership of Monument Rehabilitation and Nursing Center, LP
	3	.194	Second Amended and Restated Limited Partnership Agreement of Monument Rehabilitation and Nursing Center, LP
	3	.195	Certificate of Limited Partnership of Oak Crest Nursing Center, LP
	3	.196	Second Amended and Restated Limited Partnership Agreement of Oak Crest Nursing Center, LP
	3	.197	Certificate of Limited Partnership of Oakland Manor Nursing Center, LP
	3	.198	Second Amended and Restated Limited Partnership Agreement of Oakland Manor Nursing Center, LP
	3	.199	Amended and Restated Certificate of Limited Partnership of SHG Resources, LP
	3	.200	Second Amended and Restated Limited Partnership Agreement of SHG Resources, LP
	3	.201	Certificate of Limited Partnership of Southwood Care Center, LP
	3	.202	Second Amended and Restated Limited Partnership Agreement of Southwood Care Center, LP
	3	.203	Certificate of Limited Partnership of Texas Cityview Care Center, LP
	3	.204	Second Amended and Restated Limited Partnership Agreement of Texas Cityview Care Center, LP
	3	.205	Certificate of Limited Partnership of Texas Heritage Oaks Nursing and Rehabilitation Center, LP
	3	.206	Second Amended and Restated Limited Partnership Agreement of Texas Heritage Oaks Nursing and Rehabilitation Center, LP
	3	.207	Certificate of Limited Partnership of The Clairmont Tyler, LP
	3	.208	Second Amended and Restated Limited Partnership Agreement of The Clairmont Tyler, LP
	3	.209	Certificate of Limited Partnership of The Woodlands Healthcare Center, LP
	3	.210	Second Amended and Restated Limited Partnership Agreement of The Woodlands Healthcare Center, LP
	3	.211	Certificate of Limited Partnership of Town and Country Manor, LP
	3	.212	Second Amended and Restated Limited Partnership Agreement of Town and Country Manor, LP
	3	.213	Certificate of Limited Partnership of Travelmark Staffing, LP
	3	.214	Limited Partnership Agreement of Travelmark Staffing, LP
	3	.215	Certificate of Limited Partnership of West Side Campus of Care, LP

Number			Description
	3	.216	Second Amended and Restated Limited Partnership Agreement of West Side Campus of Care, LP
	3	.217	Certificate of Formation of Carmel Healthcare and Rehabilitation Center, LLC
	3	.218	Limited Liability Company Operating Agreement of Carmel Healthcare and Rehabilitation Center, LLC
	3	.219	Certificate of Formation of East Walnut Property, LLC
	3	.220	Limited Liability Company Operating Agreement of East Walnut Property, LLC
	3	.221	Certificate of Formation of Glen Hendren Property, LLC
	3	.222	Limited Liability Company Operating Agreement of Glen Hendren Property, LLC
	3	.223	Certificate of Formation of Holmesdale Healthcare and Rehabilitation Center, LLC
	3	.224	Limited Liability Company Operating Agreement of Holmesdale Healthcare and Rehabilitation Center, LLC
	3	.225	Certificate of Formation of Holmesdale Property, LLC
	3	.226	Limited Liability Company Operating Agreement of Holmesdale Property, LLC
	3	.227	Certificate of Formation of Liberty Terrace Healthcare and Rehabilitation Center, LLC
	3	.228	Limited Liability Company Operating Agreement of Liberty Terrace Healthcare and Rehabilitation Center, LLC
	3	.229	Certificate of Formation of Preferred Design, LLC
	3	.230	Limited Liability Company Operating Agreement of Preferred Design, LLC
	3	.231	Certificate of Formation of St. Joseph Transitional Rehabilitation Center, LLC, as amended
	3	.232	Limited Liability Company Operating Agreement of St. Joseph Transitional Rehabilitation Center, LLC
	4	.1	Indenture with respect to the 11% Senior Subordinated Notes due 2014, dated as of December 27, 2005, among SHG Acquisition Corp., Wells Fargo Bank, N.A., as trustee and Skilled Healthcare Group, Inc.
	4	.2	Form of 11% Senior Subordinated Notes due 2014 (included in exhibit 4.1)
	4	.3	Registration Rights Agreement, dated as of December 27, 2005, among SHG Acquisition Corp., Skilled Healthcare Group, Inc., each of the registrant’s subsidiaries included in exhibit 21.1 and Credit Suisse First Boston LLC.
	5	.1	Opinion of Latham & Watkins LLP regarding the validity of the 11% exchange notes due 2014.
	10	.1	SHG Holdings, Inc. Restricted Stock Plan.
	10	.2	Form of Restricted Stock Agreement.
	10	.3	Second Amended and Restated First Lien Credit Agreement, dated December 27, 2005, by and among the Company, SHG Holding, the financial institutions party thereto, and Credit Suisse, Cayman Islands, as administrative agent and collateral agent.
	10	.4	Employment agreement, dated December 27, 2005, by and between the Company and Boyd Hendrickson.
	10	.5	Employment agreement, dated December 27, 2005, by and between the Company and Jose Lynch.
	10	.6	Employment agreement, dated December 27, 2005, by and between the Company and John E. King.
	10	.7	Employment agreement, dated December 27, 2005, by and between the Company and Roland G. Rapp.
	10	.8	Employment agreement dated December 27, 2005, by and between the Company and Mark Wortley.
	10	.9	Trigger Event Cash Bonus Agreement, dated April 30, 2005, by and between Skilled Healthcare Group, Inc. and John E. King.
	10	.10	Trigger Event Cash Bonus Agreement, dated April 30, 2005, by and between Skilled Healthcare Group, Inc. and Mark Wortley.
	10	.11	Lease, dated as of August 26, 2002, by and between CT Foothill 10/241, LLC, and Fountain View, Inc. and amendments thereto.

Number			Description
	12	.1	Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
	21	.1	Subsidiaries of Skilled Healthcare Group, Inc.
	23	.1	Consent of Latham & Watkins LLP (included in Exhibit 5.1)
	23	.2	Consent of Independent Registered Public Accounting Firm
	24	.1	Power of Attorney (included in the signature pages to this Registration Statement).
	25	.1	Statement of Eligibility of Trustee with respect to the Indenture with respect to the 11% Senior Subordinated Notes due 2014.*

* To be filed by Amendment.

EX-2.1

                                                                     Exhibit 2.1

                          AGREEMENT AND PLAN OF MERGER

     This Agreement and Plan of Merger (this "AGREEMENT") is entered into as of
October 22, 2005 by and among Skilled Healthcare Group, Inc., a Delaware
corporation (the "COMPANY"), SHG Holding Solutions, Inc., a Delaware corporation
("BUYER"), SHG Acquisition Corp., a Delaware corporation ("MERGER SUB"),
Heritage Partners Management Company, LLP (the "AGENT"), and Heritage Fund II,
L.P., a Delaware limited partnership and Heritage Investors II, L.L.C., a
Delaware limited liability company (collectively, the "WARRANTHOLDERS"), solely
with respect to Sections 1.7, 1.9, 1.11 and Article 6 relating to the Warrants.

                                  INTRODUCTION

     The Boards of Directors of Buyer, Merger Sub and the Company have
authorized and approved the acquisition of the Company by the Buyer by means of
the merger of Merger Sub with and into the Company as provided herein (the
"MERGER"), with the Company continuing as the surviving corporation and a
wholly-owned subsidiary of Buyer.

     Stockholders of the Company holding shares with sufficient voting power to
adopt this Agreement pursuant to Section 251(c) of the General Corporation Law
of the State of Delaware (the "DGCL") and the Company's certificate of
incorporation intend to execute a consent pursuant to Section 228 of the DGCL
adopting this Agreement immediately following the execution and delivery of this
Agreement.

     The Warrantholders are parties hereto solely for purposes of selling their
Warrants. The Agent is a party hereto solely for the respective purposes set
forth on the signature page hereto.

     An index of defined terms is set forth in Article 9.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   ARTICLE 1
                                 MERGER; CLOSING

     1.1 THE MERGER. At the Effective Time and subject to and upon the terms and
conditions of this Agreement and the applicable provisions of the DGCL, Merger
Sub shall be merged with and into the Company, the separate corporate existence
of Merger Sub shall cease, and the Company shall continue as the surviving
corporation and as a wholly-owned subsidiary of Buyer. The surviving corporation
after the Merger is sometimes referred to hereinafter as the "SURVIVING
CORPORATION."



     1.2 EFFECTIVE TIME. Unless this Agreement is earlier terminated pursuant to
Section 7.1 hereof, the consummation of the transactions contemplated hereby
(the "CLOSING") will take place at the offices of Kaye Scholer LLP, 425 Park
Avenue, New York, New York, on (a) the latest of (x) December 30, 2005 or (y)
five business days after the conditions set forth in Article 5 are satisfied
(other than those conditions which by their nature are normally satisfied at the
Closing) or waived or (z) the date of the closing of the financing contemplated
by the CSFB Commitment (but not later than February 10, 2006), or (b) such other
date that is agreed to in writing by the Company and Buyer (the "CLOSING DATE").
On the Closing Date, the parties hereto shall cause the Merger to be consummated
by filing a Certificate of Merger in customary form, with the Secretary of State
of the State of Delaware (the "CERTIFICATE OF MERGER"), in accordance with the
applicable provisions of the DGCL (the time of such filing with the Secretary of
State of the State of Delaware shall be referred to herein as the "EFFECTIVE
TIME").

     1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time,
except as otherwise agreed to pursuant to the terms of this Agreement, all of
the property, rights, privileges, powers and franchises of the Company and
Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.

     1.4 CERTIFICATE OF INCORPORATION AND BYLAWS.

          (A) Unless otherwise determined by Buyer prior to the Effective Time,
the certificate of incorporation of the Surviving Corporation shall be amended
and restated as of the Effective Time to be identical to the certificate of
incorporation of Merger Sub as in effect immediately prior to the Effective
Time, until thereafter amended in accordance with the DGCL and as provided in
such certificate of incorporation; provided, however, that at the Effective
Time, Article 1 of the certificate of incorporation of the Surviving Corporation
shall be amended and restated in its entirety to read as follows: "The name of
the corporation is Skilled Healthcare Group, Inc."

          (B) Unless otherwise determined by Buyer prior to the Effective Time,
the bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation at the Effective Time until
thereafter amended in accordance with the DGCL and as provided in the
certificate of incorporation of the Surviving Corporation and such bylaws.

     1.5 DIRECTORS AND OFFICERS.

          (A) DIRECTORS OF SURVIVING CORPORATION. Unless otherwise determined by
Buyer prior to the Effective Time, the directors of Merger Sub immediately prior
to the Effective Time shall, together with Boyd W. Hendrickson, Jose C. Lynch
and, at his election, William Scott, be the directors of the Surviving
Corporation immediately after the Effective Time, each to hold the office of a
director of the Surviving Corporation in accordance with the provisions of the
DGCL and the


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certificate of incorporation and bylaws of the Surviving Corporation until their
successors are duly elected and qualified.

          (B) OFFICERS OF SURVIVING CORPORATION. Unless otherwise determined by
Buyer prior to the Effective Time, the officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation
immediately after the Effective Time, each to hold office in accordance with the
provisions of the bylaws of the Surviving Corporation.

          (C) DIRECTORS OF SUBSIDIARIES OF SURVIVING CORPORATION. Unless
otherwise determined by Buyer prior to the Effective Time, Buyer, the Company
and the Surviving Corporation shall cause the directors of any Subsidiaries
immediately prior to the Effective Time to be the directors of any Subsidiaries
immediately after the Effective Time, each to hold office as a director of each
such Subsidiary in accordance with the provisions of the laws of the respective
state of its incorporation and the respective bylaws of each such Subsidiary.

          (D) OFFICERS OF SUBSIDIARIES OF SURVIVING CORPORATION. Unless
otherwise determined by Buyer prior to the Effective Time, Buyer, the Company
and the Surviving Corporation shall cause the officers of the Company
immediately prior to the Effective Time to be the officers of any Subsidiaries
immediately after the Effective Time, each to hold office as an officer of each
such Subsidiary in accordance with the provisions of the laws of the respective
state of its incorporation and the bylaws of each such Subsidiary.

     1.6 (A) CERTAIN DEFINITIONS; PRE-CLOSING DELIVERIES. As used herein, the
following terms shall have the following meanings:

     "BUYER STOCK PURCHASE AGREEMENT" means an agreement between a
Securityholder and Buyer pursuant to which, immediately prior to the Effective
Time, such Securityholder shall (x) transfer shares of Common Stock to Buyer in
exchange for shares of Buyer's preferred stock and common stock, or (y) transfer
cash to Buyer in exchange for shares of Buyer's preferred stock and common stock
or (z) transfer both cash and shares of Common Stock to Buyer in exchange for
shares of Buyer's preferred stock and common stock, in each case as part of a
transaction intended to qualify under Section 351 of the Code.

     "CLOSING MERGER CONSIDERATION" means (A) $640,000,000, plus (B) the
aggregate amount, if any, of cash and cash equivalents of the Company and its
Subsidiaries on hand immediately prior to the Closing (excluding Restricted
Cash), in excess of $1,000,000, minus (C) the amount of the Indebtedness, minus
(D) the Facility Sale Proceeds and the proceeds of other sales of material
assets not in the ordinary course of business after the date hereof minus (E) if
the Med-Cal retroactive rate increase for the 2004-2005 period has been received
and the provider tax associated with such amount has not been paid, the amount
of such provider tax that will become payable.


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     "CLOSING TAX BENEFIT" means the amount by which the federal income taxes
actually payable by the Company and its Subsidiaries with respect to the fiscal
year in which the Closing occurs are less than the amount of such taxes that
would have been payable for such periods, to the extent that such difference is
as a result of deductions taken by the Company for (i) the exercise of Options
in connection with the transactions contemplated by this Agreement, (ii) payment
by the Company of the Sale Bonus Payments and (iii) the payment of the Trigger
Event Cash Bonus Payments.

     "COMMON STOCK" means the Company's Class A Common Stock, $.01 par value per
share.

     "COMPANY SECURITIES" means the outstanding shares of the Company's Common
Stock, the Company's Class B Common Stock, $.01 par value per share, the Options
and the Warrants, each of which is a "Company Security."

     "CREDIT FEES" means all fees and other amounts required to be paid under
the First Lien Credit Agreement and the Second Lien Credit Agreement in
connection with the consummation of the transactions contemplated hereby.

     "CSFB COMMITMENT" means a commitment from Credit Suisse for senior secured
and subordinated financing for the transactions contemplated hereby.

     "ESCROW AGENT" means Mellon Trust of New England, N.A.

     "ESCROW AGREEMENT" means the Escrow Agreement among the Agent, Buyer and
the Escrow Agent in the form of EXHIBIT 5.1(I) hereto.

     "FACILITY SALE PROCEEDS" means the proceeds (including the assumption of
Indebtedness and current liabilities) received by the Company or any of its
Subsidiaries prior to Closing in connection with the sale of Specified
Facilities.

     "FIRST LIEN CREDIT AGREEMENT" means the Amended and Restated First Lien
Credit Agreement dated as of June 15, 2005 by and among the Company, Credit
Suisse, Cayman Islands Branch as Administrative Agent and the other parties
named therein.

     "GENERAL ESCROW FUND" means $15,000,000.

     "INDEBTEDNESS" means, as of the Effective Time, the unpaid principal amount
of, and accrued interest on, and any other amounts payable (excluding Credit
Fees) with respect to, all indebtedness for borrowed money of or guaranteed by
the Company and its Subsidiaries (excluding all intercompany indebtedness among
the Company and its Subsidiaries), including, without limitation, any notes
payable, any deferred compensation liabilities (other than for the Sale Bonus
Payments or the Trigger Event Cash Bonus Payments) that are not current
liabilities, any capital lease obligations and all outstanding principal of and
accrued but unpaid interest under (i) the First Lien Credit Agreement, and (ii)
the Second Lien Credit Agreement.


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     "OPTIONS" means all outstanding options to purchase shares of the Company's
Common Stock.

     "RESTRICTED CASH" means cash as of immediately prior to the Closing that is
of the type categorized as "restricted cash and investments" on the Balance
Sheet.

     "ROLLOVER CASH AMOUNT" means (i) with respect to any particular
Securityholder, the amount of cash, if any, that such Securityholder agrees to
transfer to Buyer pursuant to a Buyer Stock Purchase Agreement and (ii) with
respect to general references not to any particular Securityholder, the sum of
the "Rollover Cash Amounts" determined in accordance with clause (i) for all
Securityholders.

     "ROLLOVER SHARE AMOUNT" OR "RSA" means with respect to any particular
Securityholder the amount determined pursuant to the following formula

                (CMC+EPW)-(EXP+TECBP)
     RSA = RS X ---------------------
                      CS+CSW+CES
where:

     RS    = such Securityholder's Rollover Shares

     CMC   = the Closing Merger Consideration

     EPW   = the exercise price of all Warrants

     EXP   = any amounts paid by the Agent pursuant to Section 1.8(b), based on
             a statement furnished by the Agent at Closing, plus a reserve of $1
             million for future expenses

     TECBP = the Trigger Event Cash Bonus Payments

     CS    = the number of shares of Common Stock (including Rollover Shares)
             outstanding at the Closing

     CSW   = the number of shares of Common Stock for which the Warrants were
             exercisable at Closing

     CES   = the Common Equivalent Shares of John King and Mark Wortley

     When used as a general reference not to any particular Securityholder,
"Rollover Share Amount" means the sum of the "Rollover Share Amounts" as so
determined for all Securityholders.

     "ROLLOVER SHARES" means (i) with respect to any particular Securityholder,
the number of shares of Common Stock, if any, that such Securityholder agrees to
transfer to Buyer pursuant to a Buyer Stock Purchase Agreement and (ii) with
respect to general references not to any particular Securityholder, the sum of
the "Rollover Shares" determined in accordance with clause (i) for all
Securityholders.


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     "SALE BONUS PAYMENTS" means the aggregate payments payable by the Company
to the holders of Options pursuant to those certain letter agreements dated on
or about July 29, 2005 by and between the Company and the individuals listed on
SCHEDULE 1.6(C), which will be paid by the Company immediately prior to the
Effective Time.

     "SECOND LIEN CREDIT AGREEMENT" means the Amended and Restated Second Lien
Credit Agreement dated as of June 15, 2005 by and among the Company, Credit
Suisse, Cayman Islands Branch as Administrative Agent and the other parties
named therein.

     "SECURITYHOLDERS" means all holders of Company Securities, and John King
and Mark Wortley, each of whom is a party to a Trigger Event Cash Bonus
Agreement.

     "SELLERS" means the Company and all Securityholders.

     "SPECIFIED FACILITIES" means the assets comprising the Company's businesses
known as the Comanche Nursing Center in Texas and Carson Senior Assisted Living
in California or the Company's equity and debt interests in Subsidiaries holding
only such assets and engaged in no other business.

     "STOCK CERTIFICATES" means stock certificates evidencing ownership of
Common Stock.

     "TAX ESCROW FUND" means $6,000,000.

     "TRIGGER EVENT CASH BONUS AGREEMENTS" mean those certain Trigger Event Cash
Bonus Agreements dated as of April 30, 2005 by and between the Company and each
of John King and Mark Wortley.

     "WARRANTS" means all outstanding warrants to purchase Common Stock of the
Company, to the extent not exercised or otherwise terminated prior to the
Closing.

          (B) At least two business days prior to the Closing, the Company will
furnish to the Buyer an estimate of all the components of Closing Merger
Consideration and the components of the calculation of Rollover Share Amount
other than "RS" and on the Closing Date a certificate (the "CLOSING MERGER
CONSIDERATION CERTIFICATE") indicating the amount of all the components of the
Closing Merger Consideration and setting forth a calculation of the Closing
Merger Consideration and the components of the calculation of Rollover Share
Amount other than "RS".

     1.7 CONVERSION OF COMMON STOCK; TREATMENT OF WARRANTS. As of the Effective
Time, by virtue of the Merger and without any additional action on the part of
any Securityholder,

          (A) each share of Common Stock outstanding immediately prior to the
Effective Time will, except as otherwise provided in this Section 1.7, be
cancelled and


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will cease to exist, and shall be converted into the right to receive a portion
of the Closing Merger Consideration as set forth below;

          (B) each Warrant shall be cancelled and of no further value, force or
effect, except that the Warrantholders shall be entitled to the payments
specified in Section 1.10(b);

          (C) each Share of Common Stock held by Buyer (including Rollover
Shares) will remain outstanding as one validly issued, fully paid and
non-assessable share of Common Stock of the Surviving Corporation;

          (D) each Company Security held directly or indirectly by the Company
or its Subsidiaries will be cancelled and will cease to exist, and no payment
will be made with respect thereto; and

          (E) each share of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and exchanged
for one validly issued, fully paid and nonassessable share of Common Stock of
the Surviving Corporation, and each stock certificate of Merger Sub evidencing
ownership of any such shares shall continue to evidence ownership of such shares
of capital stock of the Surviving Corporation.

     1.8 PAYMENT AT CLOSING; RETENTION AND PAYMENT OF CERTAIN AMOUNTS BY AGENT.

          (A) At the Closing, the Buyer and Merger Sub shall make a payment (i)
to the Agent, in its capacity as Agent for the Sellers, in an amount, in the
aggregate, equal to the Closing Merger Consideration, less the Rollover Share
Amount, less the Rollover Cash Amount, less the General Escrow Fund and less the
Tax Escrow Fund and (ii) to the Escrow Agent, an amount equal to the General
Escrow Fund plus the Tax Escrow Fund, in all cases by wire transfer of
immediately available funds.

          (B) Upon receipt of the amount set forth in Section 1.8(a)(i), the
Agent shall pay the expenses of the Sellers relating to the transactions
contemplated hereby which are to be borne by all Securityholders, including
without limitation the fees and expenses of Choate, Hall & Stewart LLP, any
other counsel to the Company, accountants and Credit Suisse First Boston LLC but
excluding any fees and expenses incurred by or for the benefit of the Buyer or
Merger Sub, including, without limitation, the Credit Fees and fees and expenses
with respect to Buyer's obtaining the financing contemplated by the CSFB
Commitment.

          (C) The Agent will retain from the amounts distributed to it pursuant
to Section 1.8 the amount (the "AGENT FUND") that the Agent determines to be
necessary to cover any potential obligations for the account of the Sellers
under this Agreement, and all expenses relating thereto, including without
limitation obligations for the account of the Sellers under Article 6. The Agent
Fund will be held or disbursed by the Agent to cover any such potential
obligations payable out of such amount which may arise in the


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future in connection with this Agreement. At such time as the Agent determines
that no such further payments may be due, the Agent will distribute any
remaining amounts in the Agent Fund as provided in Section 1.10. The retention
by the Agent of a portion of the Closing Merger Consideration pursuant to this
Section 1.8 shall not be evidence that the Company has breached any provision of
this Agreement or of any indemnification obligation hereunder. Notwithstanding
anything to the contrary contained herein, in no event shall any portion of the
Trigger Event Cash Bonus Payments be retained in the Agent Fund to cover
obligations for the account of the Sellers under Article 6.

     1.9 PAYMENT OF CLOSING TAX BENEFIT.

          (A) Within 15 business days following the date on which the Company
files its federal tax return for the fiscal year in which the Closing occurs,
Buyer will pay to the Agent an amount, if any, equal to the Closing Tax
Benefits, which shall be determined on the basis of such tax returns as filed,
absent manifest error. The Company will claim all available deduction, and
credits arising out of clauses (i) through (iv) of the definition of Closing Tax
Benefit.

          (B) If the Agent has any objections to the calculations of Closing Tax
Benefits, the Agent shall deliver to the Buyer a statement setting forth its
objections thereto. If such objection is not delivered to the Agent within 30
days after receipt of such payment as contemplated above, the amount paid by
Buyer shall be final, binding on and non-appealable by the parties hereto. The
Agent and the Buyer shall negotiate in good faith to resolve any objections, but
if they do not reach a final resolution within 5 business days after the
delivery of the objection, the Agent and the Buyer shall submit such dispute to
the auditors then employed by the Company or, if they will not serve, another
mutually acceptable "big four" accounting firm (the "TAX DISPUTE RESOLUTION
AUDITOR"). Any further submissions to the Tax Dispute Resolution Auditor must be
written and delivered to each party to the dispute. The Tax Dispute Resolution
Auditor shall consider only those items and amounts which are identified in the
objection as being items which the Agent and the Buyer are unable to resolve.
The Agent and the Buyer shall use their commercially reasonable efforts to cause
the Tax Dispute Resolution Auditor to resolve all disagreements as soon as
practicable. Further, the Tax Dispute Resolution Auditor's determination shall
be based solely on the presentations by the Buyer and the Agent (i.e., not on
the basis of an independent review). The resolution of the dispute by the Tax
Dispute Resolution Auditor shall be final, binding on and non-appealable by the
parties hereto. The costs and expenses of the Tax Dispute Resolution Auditor
shall be allocated between the Buyer, on the one hand, and the Securityholders,
on the other hand, based upon the percentage which the portion of the contested
amount not awarded to each party bears to the amount actually contested by such
party. If the Closing Tax Benefits as finally determined pursuant to this
Section 1.9 is less than the Closing Tax Benefits paid in accordance with
Section 1.9(a), the Buyer shall pay to the Agent (on behalf of the
Securityholders) such difference.

     1.10 DISTRIBUTIONS BY AGENT. All amounts received hereunder by the Agent
and not retained or paid to third parties pursuant to Section 1.8, or which
become eligible


                                       8



for distribution pursuant to Section 1.8 (together with any interest thereon),
will be distributed by the Agent as follows:

          (A) TRIGGER EVENT CASH BONUS PAYMENTS. The amount to be paid to each
of John King and Mark Wortley under the Trigger Event Cash Bonus Agreements,
prior to any other payments under this Section 1.10, shall be equal to the
product of (A) (x) the number of shares of Common Stock that, if held by such
executive would result in him receiving his Then Effective Ownership Percentage
(as defined in the Trigger Event Cash Bonus Agreements) of the Closing Merger
Consideration available for distribution to Securityholders hereunder (his
"COMMON EQUIVALENT SHARES") divided by (y) the denominator of the fraction
contained in the definition of Rollover Share Amount, times (B) $107 million
(such payments being referred to herein as the "TRIGGER EVENT CASH BONUS
PAYMENTS").

          (B) COMMON STOCK. The amount (the "PER-SHARE AMOUNT") to be paid to
each Securityholder in respect of each share of Common Stock held by such
Securityholder (including Rollover Shares), shall be (i) (A) the total amount
available for distribution under this Section 1.10(b) (after giving effect to
the Trigger Event Cash Bonus Payments), plus (B) the aggregate exercise price of
the Warrants, plus (C) the Rollover Share Amount, plus (D) the Rollover Cash
Amount divided by (ii) the sum of (A) the number of shares of Common Stock
(including Rollover Shares) outstanding at Closing, plus (B) the number of
shares of Common Stock for which the Warrants were exercisable at Closing, plus
(C) the Common Equivalent Shares of John King and Mark Wortley.

          (C) TRIGGER EVENT CASH BONUS COMMON EQUIVALENTS. Each of John King and
Mark Wortley shall be entitled to receive under the Trigger Event Cash Bonus
Agreements the Per-Share Amount multiplied by his Common Equivalent Shares.

          (D) WARRANTS. The amount to be paid to each Warrantholder in respect
of each Warrant held by such Warrantholder, shall be determined by multiplying
(i) the aggregate number of shares of Common Stock for which such Warrant was
exercisable at Closing by (ii) the excess of the Per-Share Amount over the per
share exercise price for such Warrant.

          (E) ROLLOVER LIMITATION. Notwithstanding the foregoing, no
Securityholder shall be entitled to receive a distribution from the Agent
pursuant to any subsection of this Section 1.10 until, and then only to the
extent that, the aggregate amount of all distributions to such Securityholder
pursuant to this Section 1.10 exceeds the sum of such Securityholder's Rollover
Share Amount plus such Securityholder's Rollover Cash Amount. A Securityholder's
Rollover Cash Amount shall be deemed to have been paid to the Buyer on behalf of
such Securityholder in satisfaction of such Securityholder's obligations to
transfer cash to Buyer pursuant to such Securityholder's Buyer Stock Purchase
Agreement.

     The parties will work together in good faith to prepare a distribution
schedule for allocating post-Closing payments by the Agent


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     The determination of the Agent of amounts payable under Sections 1.8, 1.9
and this Section 1.10 shall be final and binding.

          (F) WITHHOLDING. The Agent shall deduct and withhold from any payments
to a Securityholder such amounts as may be required to be deducted or withheld
on account of such payments or in connection with the consummation of the
transactions contemplated hereby under any tax or other legal requirement and
shall include withholding with respect to the transactions giving rise to a
Securityholder's Rollover Cash Amount, including with respect to the forgiveness
by the Company of indebtedness from William Scott as contemplated in Section
4.2. To the extent that amounts are so deducted or withheld, the Agent shall
remit such amounts to the Company and the Company shall be obligated to make all
required withholding tax payments to the applicable tax or other authorities.
Such deducted or withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Securityholder, and the Agent shall provide
to the Company and the Securityholder written notice of the amounts so deducted
or withheld.

          (G) No Securityholder may agree to invest in Buyer an amount of
Rollover Shares and Rollover Cash Amount that would result in the net cash
amount payable to such Securityholder at Closing after giving effect to (e) and
(f) above, being less than $1.

     1.11 DISSENTING SHARES. Notwithstanding any other provision of this
Agreement to the contrary, shares of Common Stock that are outstanding
immediately prior to the Effective Time and that are held by stockholders of the
Company who shall have not voted in favor of the Merger or consented thereto in
writing and who shall have properly demanded appraisal for such shares in
accordance with Section 262 of the DGCL (collectively, the "DISSENTING SHARES")
shall not be converted into or represent the right to receive a portion of the
Closing Merger Consideration. Such stockholders instead shall be entitled to
receive payment of the appraised value of such shares of Common Stock held by
them in accordance with the provisions of Section 262 of the DGCL, except that
all Dissenting Shares held by stockholders who shall have failed to perfect or
who effectively shall have withdrawn or otherwise lost their rights to appraisal
of such shares of Common Stock under such Section 262 of the DGCL shall
thereupon be deemed to have been converted into and to have become exchangeable,
as of the Effective Time, for the right to receive, without any interest
thereon, a pro rata share of the Closing Merger Consideration.

     1.12 SURRENDER OF CERTIFICATES. The Agent shall comply with the following
provisions applicable to payment of the Closing Merger Consideration:

          (A) Prior to the Effective Time, the Agent shall mail to each record
holder of Common Stock and each Warrantholder, a letter of transmittal in a form
reasonably satisfactory to the Buyer and the Agent (the "LETTER OF TRANSMITTAL")
which shall (i) specify that delivery shall be effected, and risk of loss and
title to any Stock Certificate or certificate evidencing a Warrant (a "WARRANT
CERTIFICATE") shall pass, only upon proper delivery of such Stock Certificate or
Warrant Certificate, together with such


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Letter of Transmittal duly executed, to the Company and instructions for use in
surrendering such Stock Certificates and Warrant Certificates and receiving the
payments contemplated by Section 1.10, (ii) include customary representations
and warranties from such holders as to their ownership of and ability to
surrender their Company Securities and (iii) include a waiver by such holder of
any claims against the Company and the Surviving Corporation, and their
respective Subsidiaries, that such holder has or may have in its capacity as a
holder of Common Stock or Warrants except for claims to receive the payments
contemplated by Section 1.10. After the delivery of the relevant Letter of
Transmittal and surrender of each such Stock Certificate or Warrant Certificate,
the Agent shall pay the holder of such Stock Certificate or Warrant Certificate
an amount as determined in accordance with Section 1.10 in consideration
therefor, and such Stock Certificate or Warrant Certificate shall forthwith be
cancelled. Until so surrendered, each such Stock Certificate (other than Stock
Certificates representing (1) Common Stock held by the Company or any Subsidiary
of the Company or held in the treasury of the Company or (2) Dissenting Shares)
and Warrant Certificate shall represent solely the right to receive the payments
contemplated by Section 1.10.

          (B) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any shares of Common Stock or
Warrants that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Stock Certificates or Warrant Certificates formerly
representing shares of Common Stock or Warrants are presented to the Surviving
Corporation or the Agent, such Stock Certificates or Warrant Certificates shall
be surrendered and cancelled in return for the payments contemplated by Section
1.10.

          (C) No interest shall accrue or be paid on the cash payable upon the
delivery of Stock Certificates, Warrant Certificates or Letters of Transmittal.
Neither the Agent nor any party hereto shall be liable to a holder of Common
Stock or Warrants for any cash or interest thereon delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.

          (D) In the event that any Stock Certificate or Warrant Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact and grant of indemnification by the person claiming such Stock
Certificate or Warrant Certificate to be lost, stolen or destroyed, each in form
and substance reasonably satisfactory to the Agent, the Agent shall make the
payment with respect to such Stock Certificate or Warrant Certificate to which
such person is entitled pursuant to this Article 1.

     1.13 DELIVERIES AT CLOSING BY THE SELLER AND THE COMPANY. At the Closing,
and upon satisfaction or waiver of the conditions set forth in Section 5.2, the
Company will deliver or cause to be delivered the instruments, consents,
certificates and other documents required of it by Section 5.1.

     1.14 DELIVERIES AT CLOSING BY THE BUYER. At the Closing, and upon
satisfaction or waiver of the conditions set forth in Section 5.1, the Buyer
will deliver or cause to be delivered the instruments, consents, certificates
and other documents required of it by Section 5.2.


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     1.15 POST CLOSING ADJUSTMENT.

               (i) If the Buyer has any objections to the calculations set forth
in the Closing Merger Consideration Certificate, the Buyer shall deliver to the
Agent a statement setting forth its objections thereto (an "OBJECTIONS
STATEMENT"). If an Objections Statement is not delivered to the Agent within 10
days after the Closing Date, the calculations set forth in the Closing Merger
Consideration Certificate shall be final, binding on and non-appealable by the
parties hereto. The Agent and the Buyer shall negotiate in good faith to resolve
any such objections, but if they do not reach a final resolution within 5
business days after the delivery of the Objections Statement, the Agent and the
Buyer shall submit such dispute to the auditors then employed by the Company or,
if they will not serve, another mutually acceptable "big four" accounting firm
(the "DISPUTE RESOLUTION AUDITOR"). Any further submissions to the Dispute
Resolution Auditor must be written and delivered to each party to the dispute.
The Dispute Resolution Auditor shall consider only those items and amounts which
are identified in the Objections Statement as being items which the Agent and
the Buyer are unable to resolve. The Agent and the Buyer shall use their
commercially reasonable efforts to cause the Dispute Resolution Auditor to
resolve all disagreements as soon as practicable. Further, the Dispute
Resolution Auditor's determination shall be based solely on the presentations by
the Buyer and the Agent (i.e., not on the basis of an independent review). The
resolution of the dispute by the Dispute Resolution Auditor shall be final,
binding on and non-appealable by the parties hereto. The costs and expenses of
the Dispute Resolution Auditor shall be allocated between the Buyer, on the one
hand, and the Securityholders, on the other hand, based upon the percentage
which the portion of the contested amount not awarded to each party bears to the
amount actually contested by such party.

               (ii) If the Closing Merger Consideration as finally determined
pursuant to Section 1.15(b)(i) above is greater than the Closing Merger
Consideration paid at Closing, the Buyer shall pay to the Agent (on behalf of
the Securityholders) such excess. If the Closing Merger Consideration as finally
determined pursuant to Section 1.15(b)(i) above is less than the Closing Merger
Consideration paid at Closing, the Agent (on behalf of the Securityholders)
shall pay to the Buyer such amount. Payments to be made pursuant to this Section
1.15(b)(ii) shall be made promptly (but in any event within five business days)
by wire transfer of immediately available funds to an account or accounts
designated by the Agent or Buyer, as applicable.

     1.16 TAKING OF NECESSARY ACTION; FURTHER ACTION. If at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company, then Buyer, Merger Sub, and the officers and
directors of the Company, Buyer and Merger Sub shall be fully authorized in the
name of their respective corporations or otherwise to take, and will take, all
such lawful and necessary action.


                                       12



                                   ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES
                             CONCERNING THE COMPANY

     The Company represents and warrants to the Buyer that each of the
statements contained in this Article 2 is true and correct as of the date
hereof. Except for the representations and warranties set forth in this Article
2, the Company makes no other representation or warranty (either express or
implied) herein or with respect to the transactions contemplated by this
Agreement.

     2.1 ORGANIZATION, POWER AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to own, lease and
operate its properties and to carry on its business as such business is now
conducted. The copies of the charter and by-laws of the Company, each as amended
to date (the "COMPANY CHARTER DOCUMENTS"), that have been delivered to the Buyer
by the Company are complete and correct copies thereof.

     2.2 POWER AND AUTHORITY. The Company has the corporate power and authority
and has taken all required corporate action on its part to permit it to execute
and deliver this Agreement and to carry out the terms of this Agreement and the
other agreements, instruments and documents of the Company contemplated hereby,
except for the submission of this Agreement to a vote of the Company's
stockholders.

     2.3 VALIDITY AND ENFORCEABILITY. This Agreement is, and each of the other
agreements, instruments and documents of the Company contemplated hereby will be
when executed and delivered by the Company, the valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, subject, however, to applicable bankruptcy, insolvency and other similar
laws affecting the rights and remedies of creditors generally and to general
equitable principles.

     2.4 SUBSIDIARIES. SCHEDULE 2.4 sets forth a list of the Company's
Subsidiaries. Except as set forth on SCHEDULE 2.4, neither the Company nor any
of its Subsidiaries owns or has the right to acquire any equity interest in any
corporation, limited liability company, partnership, joint venture, trust or
other business organization. The record owners of all of the issued and
outstanding capital stock or other equity interests of each of the Company's
Subsidiaries is as listed on SCHEDULE 2.4. Each Subsidiary is duly organized or
formed, validly existing and in good standing under the laws of its state of its
incorporation or organization, as set forth on SCHEDULE 2.4. Each of the
Subsidiaries has the corporate or other organizational power and authority to
own, lease and/or operate its properties and to carry on its business as such
business is now conducted. There are no outstanding options, warrants,
convertible or exchangeable securities or other rights that would obligate any
Subsidiary to issue additional capital stock or other equity interests.

     As used herein, "SUBSIDIARY" means, with respect to any Person, any
corporation of which a majority of the total voting power of shares of stock
entitled (without regard to


                                       13



the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof, or any partnership, association, limited
liability company or other business entity of which a majority of the
partnership or other similar ownership interest is at the time owned or
controlled, directly or indirectly, by such Person or one or more Subsidiaries
of such Person or a combination thereof, and specifically includes APS - Summit
Care Pharmacy, LLC. For purposes of this definition, a Person is deemed to have
a majority ownership interest in a partnership, association or other business
entity if such Person (i) is allocated a majority of the gains or losses of such
partnership, association or other business entity or would receive a majority of
the distributions in the event of a liquidation or (ii) is or controls the
managing director or general partner of such partnership, association or other
business entity. When used without reference to any Person, the term
"Subsidiary" means Subsidiary of the Company.

     2.5 FOREIGN QUALIFICATIONS. SCHEDULE 2.5 sets forth a complete and accurate
list of each jurisdiction in which the Company or any Subsidiary is qualified to
do business as a foreign entity or in which the character of the properties
owned or leased or the nature of the activities conducted by such entity makes
such qualification or licensing necessary, except for any jurisdiction(s) in
which the failure to so qualify would not have a Company Material Adverse
Effect.

     As used herein, "COMPANY MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on the assets, properties, financial condition, business or
results of operations of the Company and its Subsidiaries, taken as a whole;
provided, however, that in no event shall any of the following be or be taken
into account in the determination of whether a Company Material Adverse Effect
has occurred: (a) any change resulting from conditions generally affecting any
of the industries in which the Company or any Subsidiary operates or from
changes in general business or economic conditions if in each case they do not
have a materially disproportionate adverse effect on the Company and its
Subsidiaries compared to other businesses in the same industry and geographic
markets; or (b) any change resulting from the compliance by the Company or any
Subsidiary with the terms of, or the taking of any action by the Company or any
Subsidiary required by, this Agreement.

     2.6 CAPITALIZATION. The authorized number of shares of capital stock of the
Company is 3,500,000, consisting of 2,125,000 shares of the Company's Class A
Common Stock, 375,000 shares of the Company's Class B Common Stock and 1,000,000
shares of the Company's Preferred Stock, par value $0.01 per share. SCHEDULE 2.6
sets forth a complete and accurate list of all outstanding shares of capital
stock of the Company and the record holders thereof. Such shares are duly
authorized, validly issued, fully paid and nonassessable. Except as set forth on
SCHEDULE 2.6, (i) the Company does not have any other capital stock, equity
securities or securities containing any equity features authorized, issued or
outstanding, and there are no agreements, options, warrants or other rights
existing or outstanding which provide for the sale or issuance of any of the
foregoing by the Company, (ii) there are no agreements, written or oral,
relating to the acquisition, disposition, voting or registration under
applicable securities laws of any


                                       14



security of the Company, and (iii) no person has any right of first offer, right
of first refusal or preemptive right in connection with any future offer, sale
or issuance of securities by the Company.

     2.7 FINANCIAL STATEMENTS. The Company has delivered to the Buyer (a)
audited consolidated balance sheets of the Company and its Subsidiaries as of
December 31, 2003 and December 31, 2004, and audited consolidated statements of
income, stockholders' equity and cash flows for the fiscal years then ended, and
(b) an unaudited consolidated balance sheet of the Company (the "BALANCE SHEET")
as of August 31, 2005 (the "BALANCE SHEET DATE") and an unaudited consolidated
statement of income for the eight month period then ended (collectively, the
"FINANCIAL STATEMENTS"). The Financial Statements and the notes thereto, if any,
fairly present the consolidated financial condition and results of operations of
the Company and its Subsidiaries for the periods referred to therein, and were
prepared in accordance with the books and records of the Company and its
Subsidiaries, in conformity with United States generally accepted accounting
principles ("GAAP") consistently applied throughout the periods indicated
(except as otherwise stated therein or in the case of unaudited financial
statements for the omission of footnotes and subject to year-end adjustments).

     2.8 ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date, except as set
forth on SCHEDULE 2.8, (a) there has been no Company Material Adverse Effect,
(b) the Company and its Subsidiaries have conducted their business in all
material respects in the ordinary course consistent with past practice, (c) no
lien, security interest, mortgage, restriction or encumbrance (collectively,
"LIENS") has been placed upon any of the Company's or any Subsidiary's assets,
other than Permitted Liens, (d) there has been no damage, destruction or
casualty loss (other than those covered by insurance) which individually or in
the aggregate exceeds $100,000, and (e) neither the Company nor any Subsidiary
has (i) acquired or disposed of (by sale, assignment or transfer) any assets,
including Intellectual Property, for consideration in excess of $100,000 (other
than those included in the 2005 capital budget attached at Exhibit 4.2(b)
hereto), (ii) borrowed or guaranteed any amount (other than under the First Lien
Credit Agreement and the Second Lien Credit Agreement) or incurred or become
subject to any material liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice, (iii) made any
material investment in, or any material loan to, any other Person (other than a
Subsidiary of the Company), (iv) declared, set aside, or paid any dividend or
made any distribution with respect to its capital stock (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any of its capital stock,
except for dividends or distributions made by the Subsidiaries to their
respective parents in the ordinary course of business consistent with past
practice, (v) made any material capital expenditures or commitments therefor,
except in the ordinary course of business, (vi) made any loan to, or entered
into any other material transaction with, any of its directors, officers and/or
employees other than reasonable and customary advances of travel and other
miscellaneous expenses incurred in the ordinary course of business of the
Company or the Subsidiaries, (vii) entered into any employment or individual
consulting contract with payments exceeding or reasonably expected to exceed
$150,000 per year, any collective bargaining agreement or any other
labor-related agreements with any labor union, labor organization, employee
association, employee bargaining agent or affiliated bargaining


                                       15



agent, or modified the terms of any such existing contract or agreement, (viii)
made any change in compensation or any other material change in employment or
consulting terms (including compensation) for any of its directors or officers,
(ix) except with respect to non-retiree health and welfare plans in the ordinary
course of business, adopted any new Benefit Plan, increased the benefits payable
under any Benefit Plan or entered into any agreement to so adopt or increase
benefits payable under any Benefit Plan, (x) changed accounting methods,
policies, principles, practices or procedures, (xi) paid or satisfied any
liabilities other than in the ordinary course of business consistent with past
practice and other than prepayments of Indebtedness, (xii) made or rescinded any
material tax election, or (xiii) authorized, agreed or otherwise become
committed to do any of the foregoing.

     2.9 TAXES.

          (A) The representations set forth in this Section 2.9 are subject to
the qualifications and disclosures set forth on SCHEDULE 2.9.

          (B) For purposes of this Agreement, the following definitions shall
apply:

               (i) "TAX" or "TAXES" means (a) all taxes, charges, fees, levies,
penalties, additions or other assessments imposed by any foreign, federal, state
or local taxing authority, including, but not limited to, income, excise,
property, sales, transfer, franchise, payroll, withholding, value added, social
security or other taxes, including any interest, penalties or additions
attributable thereto, (b) any amounts described in clause (a) above owed by
another party for which a taxpayer is liable pursuant to any statute or
regulation imposing joint or several liability to taxpayers filing consolidated,
combined, unitary or other similar Tax Returns and (c) any amounts described in
clause (a) or (b) above for which a taxpayer is liable pursuant to a tax
indemnification agreement, tax sharing agreement, tax allocation agreement or
other similar agreement.

               (ii) "TAX RETURNS" means all reports, estimates, declarations of
estimated Tax, information statements and returns relating to Taxes and any
schedules attached to or amendments of any of the foregoing.

               (iii) "PRE-CLOSING TAXES" means any Taxes of the Company and its
Subsidiaries attributable to any taxable period ending on or before the Closing
Date and, with respect to any taxable period that includes but does not end on
the Closing Date, the portion of such period that ends on and includes the
Closing Date. In the case of any Taxes that are imposed on a periodic basis and
are payable for a period that includes but does not end on the Closing Date (a
"Straddle Period"), the portion of such Tax that constitutes Pre-Closing Taxes
shall (a) in the case of any Taxes other than Taxes based upon or related to
income or receipts, be deemed to be the amount of such Tax for the entire Tax
period multiplied by a fraction the numerator of which is the number of days in
the Tax period that precedes and includes the Closing Date and the denominator
of which is the number of days in the entire Straddle Period, and (y) in the
case of any Tax based upon or related to income or receipts, be deemed equal to
the amount which


                                       16



would be payable if the relevant Tax period ended on the Closing Date. Any
credits relating to a Straddle Period shall be taken into account as though the
relevant Tax period ended on the Closing Date. All determinations necessary to
give effect to the foregoing allocations shall be made in a manner consistent
with reasonable prior practice of the Company and its Subsidiaries.

          (C) The Buyer has been provided with true and correct copies of the
Tax Returns of the Company and its Subsidiaries for all open years. All such Tax
Returns are true and correct in all material respects. The Company and its
Subsidiaries have paid all Taxes when due regardless of whether shown on such
Tax Returns. Neither the Company nor any Subsidiary has any currently effective
waiver that would have the effect of extending any applicable statute of
limitations in respect of any of its Tax liabilities. The Company does not know
of any unpaid assessment against the Company or any Subsidiary of any material
Taxes for any fiscal period or any pending or threatened tax examination or
audit by any foreign, federal, state or local taxing authority. To the Company's
knowledge, all Taxes that the Company and each Subsidiary are required by law to
withhold or to collect for payment have been duly withheld and collected and, to
the extent required, paid to the proper governmental entity. There are no
material Tax Liens pending or, to the knowledge of the Company, threatened
against the Company, any Subsidiary or their respective assets or property,
other than Permitted Liens. There are no outstanding tax sharing agreements
among the Company, any Subsidiary or any other Person. The charges, accruals and
reserves with respect to Taxes on the books of the Company and the Subsidiaries
are adequate (determined in accordance with GAAP consistently applied) and are
at least equal to the Company's and the Subsidiaries' liabilities for Taxes. The
Seller is not a foreign person within the meaning of Section 1445 of the Code.
There is no contract, agreement, plan or arrangement covering any Person that,
individually or collectively, as a consequence of this transaction will give
rise to the payment (a "SECTION 280G PAYMENT") of any amount that would not be
deductible by Buyer, the Company or any of the Subsidiaries by reason of Section
280G of the Code and/or would subject the recipient of such Section 280G Payment
to an excise tax under Section 4999 of the Code (taking into account any vote of
the Securityholders approving such payments). None of the Company and its
Subsidiaries owns any interest in real property that may subject any of the
parties to a transfer tax as a result of the transactions contemplated by this
Agreement. None of the Company and its Subsidiaries is entitled to any (i) net
operating loss carryforward, (ii) investment tax credit carryforward, (iii)
research and development tax credit carryforward, (iv) foreign tax credit
carryforward, or (v) other tax credit carryforward after the Closing Date which
carryover resulted from a taxable period that ended on or before the Closing
Date.

     2.10 PERSONAL PROPERTY. The Company and each of its Subsidiaries has good
title to or a valid leasehold, license or other similar interest in all of the
tangible personal property (i) shown to be owned or leased by it on the Balance
Sheet, (ii) acquired by the Company or one of its Subsidiaries since the Balance
Sheet Date or (iii) used primarily by the Company or a Subsidiary in the
operation of their businesses, free and clear of all Liens, except for Permitted
Liens. The equipment and other tangible operating assets of the Company and its
Subsidiaries, taken as a whole, are in adequate operating condition


                                       17



and repair for the uses to which they are currently being put, and none of such
assets is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. As used herein,
"PERMITTED LIENS" means (a) such imperfections of title, easements, encumbrances
or restrictions which do not materially impair the value or current use of the
Company's or any Subsidiary's assets, (b) materialmen's, mechanics', carriers',
workmen's, warehousemen's, repairmen's and other like Liens arising in the
ordinary course of business that secure obligations reflected as liabilities on
the Company's books and records, (c) Liens for Taxes not yet due and payable, or
being contested in good faith and for which an adequate reserve is reflected on
the Company's books and records, (d) purchase money Liens incurred in the
ordinary course of business, (e) Liens securing the Indebtedness under the First
Lien Credit Agreement and the Second Lien Credit Agreement, and (f) the Liens
listed on SCHEDULE 2.10.

     2.11 REAL PROPERTY.

          (A) SCHEDULE 2.11(A) sets forth each material interest in real
property owned by the Company and its Subsidiaries (the "OWNED PROPERTY"). The
respective owner of the Owned Property has good and marketable title to the
Owned Property, free and clear of all material mortgages, liens and
encumbrances, except for Permitted Liens and as specified on SCHEDULE 2.11(A),
and enjoys peaceful and quiet possession of the Owned Property.

          (B) SCHEDULE 2.11(B) describes each interest in real property leased
by the Company and its Subsidiaries from any lessor that is not a Subsidiary,
including the lessor of such leased property, and identifies each lease or any
other arrangement under which such property is leased, including amendments and
modifications thereto (each, a "LEASE" and the property covered thereby, the
"LEASED REAL PROPERTY"). The Company and each of its Subsidiaries enjoy peaceful
and quiet possession of their respective leased premises and have not received
any written notice from any landlord asserting the existence of a material
default under any such lease or been informed in writing that the lessor under
any such lease has taken action or, to the knowledge of the Company, threatened
to terminate the lease before the expiration date specified in the lease. Except
as set forth on SCHEDULE 2.11(B), the Leases are in full force and effect, and
the Company or a Subsidiary of the Company holds a valid and existing leasehold
interest under each such Lease. All interests held by the Company or any of its
Subsidiaries as lessee or occupant of the Leased Real Property are free and
clear of Liens, other than Permitted Liens or Liens created by the owner of the
Leased Real Property. The Company has delivered or made available to the Buyer
complete and accurate copies of each of the Leases. None of the Company or any
of its Subsidiaries or, to the Company's knowledge, any other party thereto, is
in breach or default of any payment obligation under, or is otherwise in breach
or default in any material respect under, any of such Leases.

          (C) The Owned Property and Leased Real Property constitutes all real
property (or interest in real property) or currently used in the conduct of the
business of the Company and its Subsidiaries.


                                       18



          (D) Except as set forth on SCHEDULE 2.11(D), there is no pending or,
to the knowledge of the Company, any threatened condemnation, eminent domain or
similar proceeding with respect to any Owned Property or, to the knowledge of
the Company, Leased Real Property.

          (E) Each Owned Property is in compliance in all material respects with
all building, zoning, subdivision, health, safety and other applicable foreign,
federal, state and local laws and regulations. For purposes of the foregoing
sentence, compliance with zoning laws and regulations means compliance with such
laws and regulations as currently in effect. To the knowledge of the Company,
none of the buildings, plant or structures included in the Owned Property and
Leased Real Property is in need of material maintenance or repairs, except for
ordinary and routine maintenance and repairs that are not material and except
for expenditures, included in the 2005 capital budget attached at Exhibit 4.2(b)
hereto. All utility systems serving each Owned and Leased Property are adequate
for the business of the Company and its Subsidiaries.

     2.12 INTELLECTUAL PROPERTY.

          (A) As used herein "INTELLECTUAL PROPERTY" means all (i) patents,
patent applications and patent disclosures, (ii) trademarks, service marks,
trade dress, trade names and corporate names (in each case, whether registered
or unregistered) and registrations and applications for registration thereof,
together, to the extent applicable, with all of the goodwill associated
therewith, (iii) copyrights (registered or unregistered) and copyrightable works
and registrations and applications for registration thereof, (iv) computer
software data, databases and documentation thereof, (v) trade secrets and other
confidential information (including, without limitation, ideas, formulae,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), and (vi)
domain names. As used herein, "COMPANY INTELLECTUAL PROPERTY" means Intellectual
Property owned or used by the Company or any Subsidiary.

          (B) SCHEDULE 2.12 hereto contains a list of all material Company
Intellectual Property included in clauses (i), (ii), (iii), (iv) (excluding
"off-the-shelf" or "shrink wrap" programs or products, or other programs or
products licensed in the ordinary course of business) and (vi) of the definition
of Intellectual Property which the Company or any Subsidiary owns and has
registered with a governmental or other appropriate authority, or with respect
to which the Company or any Subsidiary has filed an application for such a
registration, except for any Company Intellectual Property which has been
abandoned by the Company or such Subsidiary. SCHEDULE 2.12 also contains a list
of all licenses granted by the Company or any Subsidiary to any third party with
respect to any owned Company Intellectual Property and all material licenses
granted by any third party to the Company or any Subsidiary with respect to any
Company Intellectual Property (excluding "off-the-shelf" or "shrink wrap"
programs or products, or other programs or products licensed in the ordinary
course of business). To


                                       19



the knowledge of the Company, there is no threatened loss of any material
Company Intellectual Property.

          (C) Except as set forth on SCHEDULE 2.12, (i) the Company and/or its
Subsidiaries, as the case may be, own and possess all right, title and interest
in and to the owned material Company Intellectual Property free and clear of
Liens and all registrations and applications for registrations of owned Company
Intellectual Property have been duly and timely made, are in good standing and
are recorded in the name of the Company or one of its Subsidiaries, (ii) during
the two year period prior to the date of this Agreement, neither the Company nor
any of its Subsidiaries has received any written notices of infringement or
misappropriation from any third party with respect to any third party
Intellectual Property, (iii) neither the Company nor any Subsidiary is violating
any Intellectual Property of any other person and (iv) to the Company's
knowledge, no third party is infringing on any Company Intellectual Property
owned by the Company or any Subsidiary.

     2.13 MATERIAL CONTRACTS. SCHEDULE 2.13 hereto sets forth for the Company
and its Subsidiaries a list of all of the following contracts and agreements in
effect on the date of this Agreement, except those which will be terminated at
or prior to the Closing:

          (A) contracts which provide for annual payments of more than $500,000
within any twelve month period from and after the date hereof;

          (B) agreements, contracts, indentures and other instruments of the
Company or any Subsidiary relating to the borrowing of money or to mortgaging,
pledging or otherwise placing a Lien on any asset of the Company and its
Subsidiaries, other than Permitted Liens, or the guaranty of any obligation for
the borrowing of money, in each case in excess of $500,000;

          (C) contracts which limit the ability of the Company or any Subsidiary
to engage in any line of business in any geographic area, compete with any other
Person or otherwise materially limit the method of conducting or the scope of
their businesses;

          (D) any contractual obligation with a physician, medical director,
hospital or other provider or supplier of health care services or products to
patients or referral source (including, without limitation, any physician,
hospital, or hospital discharge planner) involving annual payments to or from
the Company and its Subsidiaries in excess of $500,000;

          (E) employment, severance, retention and deferred compensation
agreements involving the payment of at least $150,000 annually by Company or any
Subsidiary;

          (F) contracts of the Company or any Subsidiary with any officer,
director or Affiliate of the Company or any Subsidiary;


                                       20



          (G) collective bargaining agreement or other contract with any union,
labor organization, employee group or similar entity;

          (H) stock purchase, stock option, phantom stock or similar plan;

          (I) lease or agreement under which it is lessee of, or holds or
operates any personal property owned by, any other party that involves payments
in excess of $200,000 in any twelve month period;

          (J) agreements relating to any completed acquisition or disposition of
an entity by the Company or any Subsidiary consummated on or after January 1,
2003, or to any pending acquisition or disposition by the Company or any
Subsidiary; or

          (K) agreements between the Company or any of its Subsidiaries on the
one hand, and any Person who was an Affiliate of a business acquired by the
Company or a Subsidiary at the time such agreement was entered into, on the
other hand;

          (L) joint venture, affiliation or partnership agreements and any other
agreements which provide for the sharing of profits and losses.

     All of the foregoing, including amendments and modifications thereto, are
herein called "MATERIAL CONTRACTS." The Company has made available to the Buyer
true and correct copies of all Material Contracts. Each Material Contract is
valid and in full force and effect. The Company or such Subsidiary, as the case
may be, and, to the knowledge of the Company, each other party thereto, have
performed all material obligations required to be performed by them thereunder.
Neither the Company nor any of its Subsidiaries is in breach or default under
any material provision of any Material Contract. To the knowledge of the
Company, no third party is in breach or default under any material provision of
any Material Contract.

     2.14 LITIGATION. Except as disclosed on SCHEDULE 2.14 and except for
Actions for personal injury and workers' compensation claims in the ordinary
course of business and covered by insurance subject to a deductible not
exceeding $1,000,000 in the aggregate for all such claims, there is no action,
arbitration, litigation, investigation (by Governmental Authorities or, to the
knowledge of the Company, other payors), suit or proceeding ("ACTIONS") pending
or, to the knowledge of the Company, threatened against the Company or any
Subsidiary, at law or in equity, or before or by any federal, state, municipal
or other court, tribunal, governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign (each, a "GOVERNMENTAL
AUTHORITY") as to which the Company has estimated in good faith, and consistent
with past practice, that the Company or a Subsidiary's liability may reasonably
be expected to exceed $100,000, and neither the Company nor any of its
Subsidiaries is subject to any outstanding judgment, order or decree of any
Governmental Authority.

     2.15 NO-CONFLICT; REQUIRED CONSENTS AND APPROVALS. Except as set forth on
SCHEDULE 2.15, and except for the expiration or early termination of the waiting
period under the HSR Act and receipt of stockholder approval of this Agreement
and the


                                       21



Merger, the Company's execution, delivery and performance of this
Agreement and the other agreements, instruments and documents of the Company
contemplated hereby do not, and will not, (a) result in any violation of, (b)
constitute a default under, (c) conflict with or result in any breach of, (d)
result in the creation of any Lien upon any material assets of the Company or
any of its Subsidiaries or upon any Company Securities under, (e) create,
increase, result in the acceleration of or create in any party the right to
increase or accelerate, any material obligations or liabilities of the Company
or any Subsidiary under, or (f) result in the termination, cancellation or
diminishment of, or create in any party the right to terminate, materially
increase or diminish the rights or entitlements under (i) the Company Charter
Documents or the certificates, or articles of incorporation or bylaws (or
equivalent organizational documents), of any Subsidiary, (ii) any Material
Contract, (iii) any Authorization, or (iv) any law, statute, regulation, rule,
ordinance, judgment, decree or order applicable to the Company or any of its
Subsidiaries. Except as set forth on SCHEDULE 2.15 and except for the filing of
the Certificate of Merger and the applicable filings and approvals under the HSR
Act, no consent, order, approval, authorization, declaration or filing with or
from any Governmental Authority or any party to a Material Contract is required
on the part of the Company or any Subsidiary for or in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby by the Company.

     2.16 LICENSES AND PERMITS. SCHEDULE 2.16 hereto sets forth a list of all
licenses, permits and authorizations of governmental authorities held by the
Company and each Subsidiary which are material to the business of the Company
and its Subsidiaries (except for licenses, permits and authorizations relating
to Environmental Laws, as to which Section 2.22 only applies, and Health Care
Laws, as to which Section 2.23 only applies) (collectively, the
"AUTHORIZATIONS"). The Authorizations represent all Authorizations required for
the Company and the Subsidiaries to conduct business as currently conducted in
all material respects and, all such Authorizations are in full force and effect
and the business of the Company and its Subsidiaries is being operated in
compliance in all material respects therewith. To the knowledge of the Company,
no Governmental Authority has threatened the suspension or cancellation of any
Authorization, except where such threatened suspension or cancellation relates
to such items of noncompliance that the Company can establish will be remedied
before such threatened suspension or cancellation would become effective.

     2.17 COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE 2.17, the
Company and each of its Subsidiaries are, and have been since January 1, 2004,
and the businesses of the Company and each Subsidiary are being, and since
January 1, 2004 have been, conducted in compliance with all foreign, federal,
state or local statutes, laws, ordinances, judgments, decrees, orders or
governmental rules and regulations applicable to them in all material respects
(except as to Environmental Laws, as to which Section 2.22 only applies, and to
Health Care Laws, as to which Section 2.23 only applies).


                                       22



     2.18 EMPLOYEES AND COMPENSATION.

          (A) Except as described on SCHEDULE 2.18 hereto, (i) no employees of
the Company or any Subsidiary are represented by any union or similar labor
organization, and (ii) neither the Company nor any Subsidiary has experienced
any labor strike, slowdown, stoppage, grievance, labor arbitration, claim of
unfair labor practices or organizational effort at any time during the last five
(5) years, nor to the knowledge of the Company are any such activities or
actions currently threatened against the Company or any Subsidiary.

          (B) SCHEDULE 2.18 sets forth (i) a true and correct list of the name
and current annual salary of each officer or employee of the Company or any
Subsidiary whose annual base salary exceeds $150,000 and (ii) any other form of
compensation (other than salary, bonuses or customary benefits) paid or payable
by the Company or any Subsidiary to each such person for the current fiscal
year.

          (C) Except as set forth on SCHEDULE 2.18, the Company and all
Subsidiaries are in compliance, in all material respects, with the Federal Fair
Labor Standards Act and all applicable federal, state and local laws relating to
employment discrimination, employee welfare and labor standards.

          (D) The Company and the Subsidiaries are in compliance, in all
material respects, with the Federal Occupational Safety and Health Act, the
regulations promulgated thereunder and all other applicable federal, state and
local laws relating to the safety of employees or the workplace or relating to
the employment of labor, including, without limitation, any provisions thereof
relating to wages, bonuses, collective bargaining, equal pay and the payment of
social security and similar payroll taxes. Except as provided in SCHEDULE 2.18
and except for routine claims brought by individual employees that will not
result in any material liability, no proceedings are pending before any federal,
state, municipal or other court, governmental, regulatory or administrative body
or agency, or private arbitration tribunal relating to labor or employment
matters, and neither the Company nor the Subsidiaries have received any notice
from any governmental, regulatory or administrative body or agency of any
pending investigation by any such body or agency or, to the knowledge of the
Company, threatened material claim by any such body or agency or other third
party relating to labor or employment matters.

          (E) Neither the Company nor any Subsidiary has incurred any liability
under the Worker Adjustment and Restraining Notification Act ("WARN") or similar
state laws with respect to their respective employees.

     2.19 BENEFIT PLANS.

          (A) SCHEDULE 2.19 hereto sets forth all employee benefit plans and
arrangements (including, but not limited to, plans described in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained by the Company or any Subsidiary for the benefit of their current or
former employees, or


                                       23



with respect to which the Company or any Subsidiary has any liability
(including, but not limited to, liabilities arising from affiliation under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended
(the "CODE"), or Section 4001 of ERISA) (the "BENEFIT PLANS").

          (B) With respect to each Benefit Plan, the Company has made available
to the Buyer true and complete copies of: (i) any and all plan documents and
agreements; (ii) any and all outstanding summary plan descriptions and material
modifications thereto; (iii) the two most recent annual reports, if applicable;
(iv) the two most recent annual and periodic accounting of plan assets, if
applicable; and (v) the most recent determination letter received from the
Internal Revenue Service (the "SERVICE"), if applicable. Since the date of the
foregoing Benefit Plan documents, there has not been any material change in the
assets or liabilities of any of the Benefit Plans or any change in their terms
and operations which could reasonably be expected to affect or alter the tax
status or materially affect the cost of maintaining such Benefit Plan. The
Company and the Subsidiaries do not have any other ERISA Affiliates. For these
purposes, "ERISA AFFILIATE" means any entity which is under common control with
the Company or any Subsidiary within the meaning of Section 414 of the Code;

          (C) Except as set forth on SCHEDULE 2.19, with respect to each Benefit
Plan: (i) such plan has been administered in accordance with its terms and all
applicable laws in all material respects; (ii) no breach of fiduciary duty has
occurred with respect to which any fiduciary of any Benefit Plan, including,
without limitation the Company, any Subsidiary (or any officer, director or
employee thereof) or any Benefit Plan, reasonably could be expected to be liable
in any material respect; (iii) no material disputes are pending or, to the
knowledge of the Company, threatened; and (iv) no "prohibited transaction"
(within the meaning of either Section 4975(c) of the Code or Section 406 of
ERISA) has occurred with respect to which the Company, any Subsidiary or any
Benefit Plan reasonably could be expected to be liable for any tax, penalty or
other liability.

          (D) Except as set forth on SCHEDULE 2.19, the consummation of the
transactions contemplated by this Agreement will not (i) accelerate the time of
payment or vesting under any Benefit Plan or (ii) increase the amount of
compensation or benefits due to any individual under any Benefit Plan.

          (E) None of the Benefit Plans is, and none of the Company or any
Subsidiary has ever maintained, had an obligation to contribute to, or incurred
any other obligation with respect to (i) a plan subject to Title IV of ERISA,
Section 412 of the Code, or Title I, Subtitle B, Part 3 of ERISA, (ii) a
"multiemployer plan," as defined in Section 3(37) of ERISA, (iii) a "multiple
employer plan," as defined in ERISA or the Code or (iv) except as set forth on
SCHEDULE 2.19, a funded welfare benefit plan, as defined in Section 419 of the
Code. Except as set forth on SCHEDULE 2.19, there are no trusts or similar
funding vehicles with respect to any Benefit Plan that is a welfare plan (within
the meaning of Section 3(1) of ERISA).

          (F) Except as set forth on SCHEDULE 2.19, none of the Company nor any
Subsidiary has any obligation to provide any deferred compensation, pension or
non-


                                       24



pension benefits to any individual, including, without limitation, any retired
or other former employee or director (or any beneficiary thereof), except for
health benefits as specifically required by the continuation coverage provisions
of federal or state law as applied to any Benefit Plan that is a group health
plan (as defined in Section 601 et seq. of ERISA) or pension benefits payable
from any Benefit Plan, which are intended to be qualified within the meaning of
Section 401(a) of the Code. All plans, agreements and other arrangements
maintained or entered into by the Company or any Subsidiary for any service
provider that are "deferred compensation" subject to Section 409A of the Code
comply with the requirements of that Section or can be timely amended to comply
with that Section.

          (G) The Company and each Subsidiary has classified all individuals who
perform services for it correctly, in accordance with the terms of each Benefit
Plan, ERISA, the Code and all other applicable laws, as common law employees,
independent contractors or leased employees, except where the failure to do so
would not reasonably be expected to result, individually or in the aggregate, in
a material liability for the Company or any Subsidiary.

     2.20 INSURANCE. SCHEDULE 2.20 contains an accurate and complete list of all
insurance policies owned, held by or applicable to the Company or any of its
Subsidiaries. All such policies are valid and in full force and effect, and all
premiums that are due and payable have been paid. No notice of denial of
coverage, cancellation or termination has been received with respect to any such
policies. Subject to annual renewal, such policies will remain in effect after
the Closing, and the applicable limits under such policies have not been
exhausted.

     2.21 BROKERS. Except as set forth on SCHEDULE 2.21, neither the Company nor
any Subsidiary has dealt with any broker, finder or similar agent with respect
to the transactions contemplated by this Agreement, and the Company and its
Subsidiaries are under no obligation to pay any broker's fee, finder's fee or
commission in connection with the transactions contemplated by this Agreement as
a result of any arrangement or agreement of the Securityholders, the Company or
any Subsidiary.

     2.22 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on SCHEDULE
2.22:

          (A) All of the Company's and its Subsidiaries' current operations are
in material compliance with all Environmental Laws (as hereinafter defined).

          (B) The Company's and its Subsidiaries' use, handling, manufacture,
treatment, processing, storage, generation, release, discharge, transportation
and disposal of medical or biohazardous material and Hazardous Substances (as
hereinafter defined) in their current operations comply with, and have not
created material liability under, applicable Environmental Laws.

          (C) The Company and each Subsidiary have obtained all material
permits, licenses and authorizations required under applicable Environmental
Laws, and


                                       25


the current operations of the Company and its Subsidiaries are in material
compliance with the terms and conditions of any required permits, licenses and
authorizations.

          (D) There are no pending or, to the knowledge of the Company,
threatened material Environmental Claims against the Company or any Subsidiary.

          (E) There is no toxic mold or fungus present on the Company's or its
Subsidiaries' owned or leased real property which requires remediation beyond
routine maintenance to protect human health or the environment.

     As used herein, the following terms shall have the meanings indicated
below:

     "ENVIRONMENTAL LAWS" shall mean all foreign, federal, state and local
statutes, regulations, rules, codes and ordinances relating to medical or
biohazardous materials, pollution, the use, treatment, storage, transportation
or disposal of Hazardous Substances or the discharge of materials into the
Environment.

     "ENVIRONMENT" shall mean soil, surface waters, groundwaters, land, surface
or subsurface strata and ambient air.

     "HAZARDOUS SUBSTANCES" shall mean any substance which is a "hazardous
substance," "hazardous waste," "toxic substance," "toxic waste," "pollutant,"
"contaminant" or words of similar import under any Environmental Law, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.) and the Clean Air Act (42 U.S.C.
Section 7401 et seq.), and including, without limitation, which contains
polychlorinated biphenyl or gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds.

     "ENVIRONMENTAL CLAIM" shall mean any notice, litigation, proceeding, order,
directive, summons, complaint or citation from any governmental authority
relating to Environmental Laws or Hazardous Substances, toxic mold or medical or
biohazardous materials.

     2.23 COMPLIANCE WITH HEALTH CARE LAWS. Except as set forth on SCHEDULE
2.23:

          (A) All of the Company's and its Subsidiaries' current operations are
in compliance with all Health Care Laws (as hereinafter defined), except where
any failure to comply would not have a Company Material Adverse Effect.

          (B) The Company and the Subsidiaries have obtained all material
permits, licenses and authorizations required under applicable Health Care Laws
and are certified for participation under all Government Programs (as
hereinafter defined) from which they seek reimbursement, and the current
operations of the Company and its Subsidiaries are in compliance in all material
respects with the terms and conditions of any such permits, licenses,
authorizations and certifications, in each case.


                                       26



          (C) There are no material pending or threatened Health Care Claims
against the Company or any Subsidiary.

          (D) The Company and its Subsidiaries have timely filed substantially
all claims and reports required to be filed prior to the date hereof with
respect to the Government Programs, all fiscal intermediaries and/or carriers
and other private payors, and all such claims and reports are complete and
accurate in all material respects and have been prepared in material compliance
with all applicable Health Care Laws governing reimbursement and payment claims.
The Company and its Subsidiaries have paid or caused to be paid all known and
undisputed refunds, overpayments, discounts or adjustments which have become due
pursuant to such claims and reports, and have not, to the Company's knowledge,
claimed or received reimbursement from any Government Program or any private
payor in excess of the amounts permitted by applicable law.

          (E) No member, stockholder, director, officer, agent or employee of
the Company or any of its Subsidiaries is, to the Company's knowledge, excluded,
suspended or debarred from participation, or is otherwise ineligible to
participate, in any of the Government Programs.

     As used herein, the following terms shall have the meanings indicated
below:

     "GOVERNMENT PROGRAM" shall include the Medicare program, state Medicaid
programs, the CHAMPUS/TRICARE programs and any other state health care program.

     "HEALTH CARE LAWS" shall mean all federal and state statutes, regulations,
rules and other program requirements relating to the operation of a skilled
nursing facility or relating to other current health care operations of the
Company or its Subsidiaries. These laws include, but are not limited to, the
federal Medicare and Medicaid statutes (which include, but are not limited to,
42 U.S.C. Sections 1320a-7, 1320a-7a, 1320a-7b, 1395nn), the federal
CHAMPUS/TRICARE statute, the Federal False Claims Act (31 U.S.C. Section 3729),
the regulations promulgated pursuant to such federal statutes, or related state
or local statutes or regulations, including, but not limited to, the following:
(i) knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any application for any benefit or payment;
(ii) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; (iii) presenting or causing to be presented a claim for
reimbursement for services that is for an item or service that was known or
should have been known to be not provided as claimed or false or fraudulent;
(iv) failing to disclose knowledge of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, which intent is to fraudulently secure an such benefit or
payment; (v) knowingly and willfully offering, paying, soliciting or receiving
any remuneration (including any kickback, bribe or rebate), directly or
indirectly, overtly or covertly, in cash or in kind in return for referring an
individual to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by a
Government Program or in return for purchasing, leasing or ordering or arranging
for or recommending purchasing, leasing or ordering any good, facility, service
or item for which payment may


                                       27



be made in whole or in part by a Government Program; (vi) knowingly or willfully
making or causing to be made or inducing or seeking to induce the making of any
false statement or representation (or omit to state a fact required to be stated
therein or necessary to make the statements contained therein not misleading) of
a material fact with respect to a facility in order that the facility may
qualify for participation in any Government Program or information required to
be provided under Section 1124A of the Social Security Act (42 U.S.C. Section
1320a-3) and (vii) the Standards for Privacy of Individually Identifiable Health
Information, the Security Standards for the Protection of Electronic Protected
Health Information and the Standards for Electronic Transactions and Code Sets
promulgated pursuant to the Health Insurance Portability and Accountability Act
of 1996 and codified at 45 C.F.R. Parts 160 and 164 and any state laws relating
to patient privacy and/or security of health care records.

     "HEALTH CARE CLAIM" shall mean any litigation, proceeding, order,
investigation, directive, summons, complaint or citation from any governmental
authority relating to Health Care Laws.

     2.24 AFFILIATED TRANSACTIONS. Except as set forth on SCHEDULE 2.24 and
except for reimbursements to Agent and its Affiliates prior to Closing, no
officer, director or Affiliate of the Company or any of its Subsidiaries or, to
the Company's knowledge, any individual in such officer's or director's
immediate family, is a party to any agreement, contract or commitment or has
within the past twelve months engaged in any transaction with the Company or any
Subsidiary or has any interest in any property used by the Company or any
Subsidiary.

     2.25 PERSONAL INFORMATION. Each of the Company and each of the Subsidiaries
has a written privacy policy meeting the requirements of applicable laws
governing the collection, use and disclosure of personal information, and the
Company and each of the Subsidiaries are in compliance, in all material
respects, with its privacy policy and with all such laws.

     2.26 UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE 2.28, neither
the Company nor any of its Subsidiaries has any liabilities that are of a nature
that would be required to be disclosed on a consolidated balance sheet of the
Company and its Subsidiaries prepared in conformity with GAAP, including the
footnotes thereto, other than (a) liabilities disclosed on the Interim Balance
Sheet or (b) liabilities incurred in the ordinary course of business since the
date of the Interim Balance Sheet consistent with past practices.

     2.27 ABSENCE OF CERTAIN BUSINESS PRACTICES. Since January 1, 2004, neither
the Company, any of its Subsidiaries nor any of their respective directors,
officers, employees, or, to the knowledge of the Company, any agents,
representatives or any other Person associated with or acting for or on behalf
of the Company or any of its Subsidiaries, has, directly or indirectly, (a) made
or agreed to give any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any Person, private or public, regardless
of form, whether in money, property or services, (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for business


                                       28



secured, (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of the Company or any of its Subsidiaries or (b)
received, directly or indirectly, any rebates, payments, commissions,
promotional allowances or any other economic benefits, regardless of their
nature or type, from any customer, governmental employee or other person or
entity with whom the Company will do business directly or indirectly, which, in
the case of either clause (a) or clause (b) above, could reasonably be expected
to subject the Company or any Subsidiary to any material damage or penalty in
any civil, criminal or governmental litigation or proceeding. Neither the
Company nor any of its Subsidiaries has established or maintained any fund or
asset that has not been recorded in the books and records of the Company and its
Subsidiaries.

                                   ARTICLE 3
                   REPRESENTATIONS AND WARRANTIES OF THE BUYER
                                 AND MERGER SUB

     The Buyer and Merger Sub hereby jointly and severally represent and warrant
to the Company that each of the statements contained in this Article 4 is true
and correct as of the date hereof.

     3.1 ORGANIZATION, POWER AND STANDING. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all requisite power and authority to own its properties and to
carry on its business as such business is now conducted and presently proposed
to be conducted. Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with all requisite
power and authority to own its properties and to carry on its business as such
business is now conducted and presently proposed to be conducted.

     3.2 POWER AND AUTHORITY; NO-CONFLICT. Each of the Buyer and Merger Sub has
full power and authority and has taken all required action necessary to permit
it to execute and deliver and to carry out the terms of this Agreement and all
other agreements, instruments and documents required hereby, and none of such
actions will result in any violation of, be in conflict with or constitute a
default under any charter, by-laws, law, statute, regulation, ordinance,
contract, agreement, instrument, judgment, decree or order to which the Buyer or
Merger Sub is a party or by which the Buyer or Merger Sub or their respective
assets are bound.

     3.3 CONSENTS AND APPROVALS. Except for any applicable filings under the HSR
Act, and except for the filing of the Certificate of Merger, no consent, order,
approval, authorization, declaration or filing from or with any governmental
authority or third party is required on the part of the Buyer or Merger Sub for
the execution, delivery and performance of this Agreement by the Buyer or Merger
Sub and the consummation by them of any of the transactions contemplated by this
Agreement and the other agreements, instruments and documents to be executed by
any of them pursuant to this Agreement.


                                       29



     3.4 VALIDITY AND ENFORCEABILITY. This Agreement constitutes, and each other
agreement, instrument and document of the Buyer and Merger Sub contemplated
hereby will be when executed and delivered, the valid and legally binding
obligation of the Buyer and Merger Sub, respectively, enforceable against it in
accordance with their respective terms, subject, however, to applicable
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors and to general equitable principles.

     3.5 BROKERS. The Buyer has not dealt with any broker, finder or similar
agent with respect to the transactions contemplated by this Agreement, and the
Buyer is not under any obligation to pay any broker's fee, finder's fee,
commission or similar amount in connection with the consummation of the
transactions contemplated by this Agreement.

     3.6 QUALIFYING BUYER. Buyer, together with its Affiliates, is a Qualifying
Buyer. As used herein, "QUALIFYING BUYER" has shall have the meaning given to
such term in the First Lien Credit Agreement and the Second Lien Credit
Agreement.

     3.7 NO OTHER AGREEMENTS. Except for the agreements expressly contemplated
hereby, neither the Buyer, Merger Sub nor any Affiliate thereof has any other
agreements, arrangements or understandings with any director, officer, employee,
consultant, stockholder or Affiliate of the Company or any Subsidiary in respect
of the transactions contemplated hereby. As used herein, "AFFILIATE" shall have
the meaning given to it under Rule 405 promulgated under the Securities Act of
1933, as amended.

     3.8 REGULATORY MATTERS. Buyer and Merger Sub are newly formed corporations
that have not engaged in any business or other activities other than in
connection with the transactions contemplated by this Agreement. The controlling
stockholder of Buyer does not have actual knowledge that Buyer or Merger Sub
would be ineligible to obtain additional licenses, permits, certificates, or
other governmental approvals must be obtained by Buyer or Merger Sub to
consummate the Merger or operate the business of the Company and its
Subsidiaries after the Closing.

     3.9 NO OTHER REPRESENTATIONS OR WARRANTIES OF SECURITYHOLDERS OR THE
COMPANY. Each of Buyer and Merger Sub acknowledges that none of the
Securityholders, the Company or any of their respective directors, officers,
Affiliates, managers, members, employees, consultants, agents, counsel or
advisors makes or has made any representation or warranty to the Buyer, Merger
Sub or their respective Affiliates or financing sources, except for the
representations and warranties of the Company expressly set forth in Article 2.
In particular, and without limiting the generality of the foregoing, each of
Buyer and Merger Sub acknowledges that no representation or warranty is made
with respect to any financial projections, or with respect to the information
contained in the Confidential Information Memorandum delivered to the Buyer by
Credit Suisse First Boston LLC or in any management presentations and
accompanying materials.


                                       30



                                    ARTICLE 4
                                    COVENANTS

     4.1 ACCESS TO INFORMATION; CONFIDENTIALITY.

          (A) The Company shall permit the Buyer, Merger Sub and their counsel,
accountants and other representatives full access, upon reasonable notice and
during normal business hours throughout the period prior to the Closing, to the
properties, senior executive personnel, books and records of the Company and its
Subsidiaries and shall use reasonable efforts to provide access to Persons doing
business with the Company and its Subsidiaries. Any such access shall be managed
by and conducted through the Company, and shall be subject to such additional
limitations as the Company may reasonably required to ensure compliance with the
Health Insurance Portability and Accountability Act of 1996 and its accompanying
Privacy and Security Regulations set forth at 45 C.F.R. Parts 160 and 164, and
as otherwise required to prevent unreasonable disruption of the business of the
Company or any Subsidiary.

          (B) The confidentiality agreement between the Company or Credit Suisse
First Boston LLC and the Buyer or an Affiliate of the Buyer dated July 14, 2005,
2005 shall remain in full force and effect and shall be applicable to the Buyer.

     4.2 CONDUCT OF BUSINESS. Between the date of this Agreement and the Closing
or earlier termination of this Agreement, unless the Buyer shall otherwise
consent in writing:

          (A) REQUIRED ACTIONS. The Company shall, and shall cause each
Subsidiary to:

               (i) maintain its legal existence;

               (ii) conduct its business only in the ordinary course consistent
with past practices; and

               (iii) use all reasonable efforts to operate in such a manner as
to assure that the representations and warranties of the Company set forth in
this Agreement will be true and correct in all material respects as of the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date.

          (B) PROHIBITED ACTIONS. Except as set forth on SCHEDULE 4.2 and except
as specifically required by this Agreement, the Company shall not, and shall not
permit any Subsidiary to, do any of the following:

               (i) authorize or effect any change to the Company Charter
Documents or the respective organizational documents of the Subsidiaries;

               (ii) assign, transfer or dispose of any properties or assets,
including Intellectual Property, having a recorded cost or for consideration in
excess of


                                       31



$100,000 or acquire any material asset for consideration in excess of $100,000
(other than the Specified Facilities and other than as set forth in the 2005
capital budget schedule attached hereto at Exhibit 4.2(b));

               (iii) incur any indebtedness for borrowed money or guarantee any
amount or incur or become subject to any material liabilities, other than in the
ordinary course of business consistent with past practices and except with
respect to the First Lien Credit Agreement and the Second Lien Credit Agreement;

               (iv) subject any of its properties or assets to any Lien, other
than Permitted Liens;

               (v) make any dividend or distribution on or redemption of its
equity interests;

               (vi) modify, amend, cancel or terminate any Material Contract,
except in the ordinary course of business;

               (vii) make any change in its accounting practices, other than any
change required by applicable law or GAAP;

               (viii) make any material change to any material Tax election or
Tax return, other than any change required by law;

               (ix) adopt any plan or agreement for or effect any restructuring,
merger, arrangement, consolidation, recapitalization, reclassification, stock
dividend, stock split or like change in its capitalization;

               (x) issue, sell, or transfer, pledge, dispose of or encumber any
of its capital stock or other equity securities, securities convertible into its
capital stock or other equity securities or warrants, options or other rights to
acquire its capital stock or other equity securities, or any bonds or debt
securities, except upon the exercise of options or warrants outstanding on the
date hereof;

               (xi) make any material investment in, or any material loan to,
any other Person (other than a Subsidiary of the Company);

               (xii) declare, set aside or pay any dividend or make any
distribution with respect to its capital stock (whether in cash or in kind) or
redeem, purchase or otherwise acquire any of its capital stock, except for
dividends or distributions made by the Subsidiaries to their respective parents
in the ordinary course of business consistent with past practice;

               (xiii) make any capital expenditures or commitments therefor,
except in the ordinary course of business or as set forth in the 2005 capital
budget schedule attached hereto at EXHIBIT 4.2(B);


                                       32



               (xiv) make any loan to, or enter into any other material
transaction with, any of its directors, officers, and or employees other than
for reasonable and customary advances of travel and other miscellaneous expenses
incurred in the ordinary course of business of the Company or the Subsidiaries;

               (xv) enter into any contract, agreement, arrangement or
commitment that would have been required to have been disclosed as a Material
Contract pursuant to Section 2.13 had it been entered into prior to the date
hereof;

               (xvi) except with respect to non-retiree health and welfare plans
in the ordinary course of business, adopt any new Benefit Plan, increase the
benefits payable under any Benefit Plan or enter into any agreement to so adopt
or increase benefits payable under any Benefit Plan;

               (xvii) make any material change (or any change that is intended
to affect the timing of cash flow) to the methods, procedures or timing for
billing, collecting, or recording accounts receivable, or make any material
change (or any change that is intended to affect the timing of cash flow) to the
methods, procedures or timing for paying or recording accounts payable or
request any payor to make any change in the timing or manner its payments to the
Company or its Subsidiaries;

               (xviii) make any amendment to the First Lien Credit Agreement or
the Second Lien Credit Agreement, or take any other action that would have the
effect of making the transactions contemplated by this Agreement not qualify as
a Qualifying Disposition;

               (xix) reduce the amount of Restricted Cash as shown on the
Balance Sheet other than by making payments on account of the liabilities for
which it is reserved;

               (xx) authorize, agree or commit to do any of the foregoing;

Nothing contained in this Section 4.2 shall preclude the Company from forgiving,
as compensation for services rendered by him, the indebtedness owed to the
Company by William Scott.

     4.3 EXCLUSIVITY. From the date of this Agreement until the Closing Date or
the earlier termination of this Agreement, the Sellers will not, directly or
indirectly, solicit any competing offers for the acquisition of the Company and
its Subsidiaries, or any merger, sale of all or substantially all of the assets
or business of the Company and its Subsidiaries or similar transactions
involving the Company and its Subsidiaries, or provide any information, have any
discussions or negotiate with respect to any unsolicited offer or indication of
interest with respect to any such acquisition or sale.

     4.4 CONSENTS AND APPROVALS; STOCKHOLDER VOTE. From the date of this
Agreement until the Closing Date or the earlier termination of this Agreement,
the parties shall cooperate and use all reasonable efforts to obtain (a) all
governmental and


                                       33



regulatory approvals and actions necessary to consummate the transactions
contemplated hereby which are required to be obtained by applicable law or
regulations or otherwise and (b) all consents and approvals which are listed on
SCHEDULE 2.15 and marked by an asterisk. The Company will promptly seek the
adoption and approval of the Agreement and the Merger by the stockholders of the
Company, and take the actions described in Section 5.1(j) hereof.

     4.5 HSR ACT FILINGS. To the extent required in connection with the
transactions contemplated by this Agreement, within ten business days following
the date of execution of this Agreement the parties shall promptly make or cause
to be made any and all required filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), and will request early
termination of the waiting period required under the HSR Act. The Company shall
coordinate and cooperate with the Buyer in exchanging such information and
providing such assistance as the Buyer may reasonably request in connection with
the foregoing, including cooperating and promptly responding to any inquiries,
requests for information or investigations initiated by the Federal Trade
Commission or the Department of Justice in connection with any such filings.

     4.6 COMMERCIALLY REASONABLE EFFORTS. From the date of this Agreement until
the Closing Date or the earlier termination of this Agreement, the parties agree
to act in good faith and use commercially reasonable efforts to obtain the
satisfaction of the conditions specified in this Agreement necessary to
consummate the transactions contemplated hereby.

     4.7 TAX REFUNDS. After the Closing, all refunds or other amounts received
or receivable by the Buyer, the Company or any Subsidiary in respect of
Pre-Closing Taxes shall be paid by the Buyer or the Company to the Agent
promptly upon receipt. No such amounts shall be used or applied to pay Taxes
which may be due in respect of any subsequent period.

     4.8 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.

          (A) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative (each, a
"PROCEEDING"), in which any person who is now, or has been at any time prior to
the Closing, a director or officer of the Company or any of its Subsidiaries
(the "INDEMNIFIED PERSONS") is, or is threatened to be, made a party thereto
based in whole or in part on the fact that such person is or was a director or
officer of the Company or any of its Subsidiaries, whether in any case asserted
or arising before, on or after the Closing, the Company and its Subsidiaries
shall, to the fullest extent provided by applicable law, the Company Charter
Documents or the certificates of incorporation and the bylaws (or similar
organizational documents) of the Subsidiaries to such persons by the Company and
the Subsidiaries as of the date hereof, indemnify and hold harmless such
Indemnified Person from and against any and all losses, claims, damages,
liabilities, costs, expenses (including reasonable attorneys' fees and expenses
in advance of the final disposition of any Proceeding to each Indemnified Person
to the fullest extent permitted by law),


                                       34



judgments, fines and amounts paid in settlement incurred in connection with or
arising out of such Proceeding.

          (B) An Indemnified Person shall notify the Company of the existence of
a Proceeding for which such Indemnified Person is entitled to indemnification
hereunder as promptly as reasonably practicable after such Indemnified Person
learns of such Proceeding; provided, that the failure to so notify shall not
affect the obligations of the Company and its Subsidiaries under this Section
4.8 except to the extent such failure to notify actually prejudices the Company
and its Subsidiaries. The Company, at its expense, shall have the right to
control the defense of the Proceeding with counsel selected by the Company and
reasonably acceptable to the Indemnified Person. The Indemnified Person and the
Company and its Subsidiaries shall cooperate fully with each other in connection
with the defense of any Proceeding. No settlement of a Proceeding may be made by
the Company or any Subsidiary without the Indemnified Person's consent, except
for a settlement which requires no more than a monetary payment for which the
Indemnified Person is fully indemnified. No settlement of a Proceeding may be
made by an Indemnified Person without the consent of the Company, unless such
consent is unreasonably withheld, delayed or conditioned.

          (C) Buyer shall, or shall cause the Company and its Subsidiaries to,
maintain run-off or extended reporting period director and officer liability
insurance providing coverage for the individuals who were officers and directors
of the Company and its Subsidiaries prior to Closing comparable to the policy or
policies maintained by the Company or its Subsidiaries immediately prior to the
Closing for the benefit of such individuals; provided that such insurance need
not be maintained to the extent the aggregate cost of such insurance would
exceed $300,000, except to the extent such excess is paid out of the Agent Fund.
If the $300,000 limitation is applicable, the Buyer shall, or shall cause
Company and its Subsidiaries to, maintain the maximum director and officer
liability insurance coverage as is reasonably available for that cost.

          (D) The provisions of this Section 4.8 are intended to be for the
benefit of, and enforceable by, each Indemnified Person and such Indemnified
Person's estate, heirs and representatives, and nothing herein shall affect any
indemnification rights that any Indemnified Person or such Indemnified Person's
estate, heirs and representatives may have under the Company Charter Documents,
the respective organizational documents of the Subsidiaries, any contract,
applicable law or otherwise.

          (E) The obligations of the Company and its Subsidiaries under this
Section 4.8 shall continue in full force and effect for a period commencing as
of the Closing and ending on the six (6) year anniversary of the Closing;
provided, that all rights to indemnification in respect of any claim for
indemnification under this Section 4.8 asserted or made within such period shall
continue until the final disposition of such claim.

     4.9 BOOKS AND RECORDS. From and after the Closing, the Buyer will cause the
Company and its Subsidiaries to maintain a reasonable records retention policy.
For a period of seven (7) years following the Closing, the Agent and its
accountants, lawyers


                                       35



and representatives shall be entitled upon reasonable notice and during normal
business hours to have access to and to make copies of relevant books and
records of the Company or any of its Subsidiaries with respect to periods or
occurrences prior to Closing for any reasonable purpose relating to the
Securityholders' ownership of the Company or any of its Subsidiaries prior to
the Closing, including, without limitation, the preparation of tax returns. In
the event of any litigation or threatened litigation between the parties
relating to this Agreement or the transactions contemplated hereby, the
covenants contained in this Section 4.9 shall not be considered a waiver by any
party of any right to assert the attorney-client privilege.

     4.10 SALE BONUS PAYMENTS. The Company shall make the Sale Bonus Payments
immediately prior to the Closing.

     4.11 WARN ACT. Neither Buyer nor Merger Sub will, at any time prior to
ninety (90) days after the Closing Date, effectuate a "plant closing" or "mass
layoff" as those terms are defined in the WARN Act or any similar termination or
reduction in force under applicable state or local law.

     4.12 FILING OF TAX RETURNS. The Company shall prepare and file or cause to
be prepared and filed on a timely basis all Tax Returns with respect to the
Company and the Subsidiaries that are required to be filed on or before the
Closing Date.

     4.13 COOPERATION. The Company shall, and shall cause its Subsidiaries and
their respective officers and directors to, provide, and shall use commercially
reasonable efforts to cause its auditors and accountants to provide, reasonable
cooperation in connection with obtaining debt financing in connection with the
transactions contemplated by this Agreement, including (i) making available
members of senior management, representatives and advisors to (x) participate in
the preparation of an offering memorandum, private placement memorandum or other
customary offering document for a proposed offering of debt securities, and
confidential information memoranda and other marketing materials for syndication
of proposed credit facilities and projections and similar materials related
thereto and (y) prepare for and participate in meetings, due diligence sessions,
road shows and similar presentations to and with, among others, prospective
lenders, investors and ratings agencies, and (ii) arranging for customary review
of the financial statements by the Company's independent accountants and
delivery by such accountants of customary comfort letters in respect thereof.
The Company shall, and shall cause each of its Subsidiaries to, ensure that at
all times prior to and during the syndication of the debt financing contemplated
by the CSFB Commitment, there are no other issues of debt securities or
commercial bank or other credit facilities of the Company or any of its
Subsidiaries being offered, placed or arranged.

                                   ARTICLE 5
                              CONDITIONS TO CLOSING

     5.1 CONDITIONS PRECEDENT TO THE BUYER'S AND MERGER SUB'S OBLIGATIONS. The
obligation of Buyer and Merger Sub to effect the Merger and to consummate the


                                       36



other transactions contemplated by this Agreement is expressly subject to the
fulfillment or express written waiver of the following conditions on or prior to
the Closing Date:

          (A) REPRESENTATIONS AND WARRANTIES TRUE. (i) Except with respect to
the representations and warranties set forth in Section 2.23, (A) each of the
representations and warranties contained in Article 2 (other than those that
address matters as of particular dates) shall be true and correct when made and
at and as of the Closing as though then made (disregarding any qualification as
to materiality, Material Adverse Effect, or a similar concept) and (B) each of
the representations and warranties set forth in Article 2 that addresses matters
as of particular dates shall be true and correct as of such dates (disregarding
any qualification as to materiality, Material Adverse Effect or similar
concept), unless in the case of (A) and (B) the failure to be true and correct
does not, individually or in the aggregate, have a Company Material Adverse
Effect.

               (ii) The representations and warranties set forth in Section 2.23
shall be true and correct in all material respects when made and at and as of
the Closing as though then made (provided that any representation or warranty
contained in Section 2.23 that is qualified by reference to materiality,
Material Adverse Effect, or a similar phrase shall be true and correct), unless
the failure to be true and correct would not, individually or in the aggregate,
reasonably be expected to result in Losses of at least $5 million.

          (B) COVENANTS PERFORMED. The Company shall have performed in all
material respects, on or before the Closing Date, (i) all obligations, covenants
and agreements contained in this Agreement, other than Section 4.2(a)(iii),
which by the terms hereof are required to be performed by it on or before the
Closing Date and (ii) the covenant contained in Section 4.2(a)(iii) unless the
failure to perform such covenant on or before the Closing Date would not have a
Company Material Adverse Effect.

          (C) COMPLIANCE CERTIFICATE. The Buyer shall have received a
certificate signed by an authorized officer of the Company certifying as to the
matters set forth in Sections 5.1(a) and (b) above.

          (D) STOCKHOLDER APPROVAL. The requisite approval of this Agreement and
the Merger by the stockholders of the Company shall have been obtained and
remain in full force and effect.

          (E) REQUIRED CONSENTS. All of the approvals, consents and licenses
listed on SCHEDULE 2.15 and marked with an asterisk shall have been obtained.

          (F) NO INJUNCTION OR GOVERNMENTAL LITIGATION. There shall not be (i)
any judgment, order or decree of any court or Governmental Authority that
restrains, enjoins or otherwise prohibits the transactions which are the subject
of this Agreement or (ii) any pending Action by a Governmental Authority seeking
to restrain, enjoin or otherwise prohibit the transactions which are the subject
of this Agreement or to obtain a material penalty or other remedy with respect
thereto.


                                       37



          (G) HSR ACT. The waiting period under the HSR Act applicable to the
transactions contemplated by this Agreement shall have expired or been
terminated.

          (H) FIRPTA CERTIFICATION. The Buyer shall have received from the
Seller a certificate of non-foreign status that satisfies the requirements of
Treasury Regulations Section 1.1445-2(b)(2)(i).

          (I) ESCROW AGREEMENT. The Agent and the Escrow Agent shall have
executed and delivered to the Buyer the Escrow Agreement.

          (J) 280G MATTERS. No later than five business days prior to the
Closing Date, the Company will provide to Buyer written evidence, reasonably
satisfactory to Buyer, including, without limitation, any materials and consents
distributed to shareholders, that all actions necessary have been (or prior to
the Closing will be) done to ensure that no payment made in connection with the
consummation of the transactions contemplated by this Agreement or the
foregiveness of indebtedness to Mr. Scott contemplated by Section 4.2, will, in
whole or in part, be nondeductible under Section 280G of the Code or cause the
recipient of such Section 280G Payment to be subject to an excise tax pursuant
to Section 4999 of the Code.

          (K) LEGAL OPINIONS. The Company shall have delivered to the Buyer
legal opinions in the form of EXHIBIT 5.1(K) from counsel to the Company.

          (L) STOCKHOLDER AGREEMENT TERMINATION. The Buyer shall have received
from the Agent evidence satisfactory to Buyer that the amended and restated
shareholders agreement dated as of August 15, 2003 by and among the Company
(formerly Fountain View, Inc.) and certain other Persons (the "SHAREHOLDERS
AGREEMENT") will terminate simultaneously with the Closing hereunder.

          (M) NO COMPANY MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, there shall not have occurred a Company Material Adverse Effect.

     5.2 CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS. The obligation of
the Company to effect the Merger and to consummate the other transactions
contemplated by this Agreement is expressly subject to the fulfillment or
express written waiver of the following conditions on or prior to the Closing
Date:

          (A) REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of the Buyer and Merger Sub contained in Article 3 shall be true
and correct in all material respects when made and at and as of the Closing.

          (B) OBLIGATIONS PERFORMED. The Buyer and Merger Sub shall have
performed in all material respects, on or before the Closing Date, all
obligations, covenants and agreements contained in this Agreement which by the
terms hereof are required to be performed by the Buyer and Merger Sub on or
before the Closing Date.


                                       38



          (C) COMPLIANCE CERTIFICATE. The Company shall have received a
certificate signed by an authorized officer of the Buyer certifying as to the
matters set forth in Sections 5.2(a) and (b).

          (D) NO INJUNCTION, ETC. There shall not be any judgment, order or
decree of any court or Governmental Authority that restrains, enjoins or
otherwise prohibits the transactions which are the subject of this Agreement.

          (E) CLOSING PAYMENTS. The Buyer shall have made the payments
contemplated by Section 1.8(a).

          (F) STOCKHOLDER APPROVAL. The requisite approval of this Agreement and
the Merger by the stockholders of the Company shall have been obtained and
remain in full force and effect.

          (G) HSR ACT. The waiting period under the HSR Act applicable to the
transactions contemplated by this Agreement shall have expired or been
terminated.

          (H) ESCROW AGREEMENT. The Buyer and the Escrow Agent shall have
executed and delivered to the Agent the Escrow Agreement.

                                   ARTICLE 6
                            SURVIVAL; INDEMNIFICATION

     6.1 SURVIVAL. The parties agree that the representations and warranties
contained in this Agreement shall survive the Closing until April 30, 2007 (the
"CUT-OFF DATE"). Notwithstanding the preceding sentence, each of the
representations and warranties of the Company contained in Section 2.9 of this
Agreement shall survive until three years after the Closing Date (the "TAX
CUT-OFF DATE"). No claim for indemnification hereunder for breach of any
representation or warranty or breach of any covenant or agreement to be
performed at or prior to Closing (the "PRE-CLOSING COVENANTS") may be brought
after the Cut-Off Date or Tax Cut-Off Date, as applicable, except for claims (a)
of which the Securityholders of the Company have been notified in writing
pursuant to Section 6.4 by the Buyer prior to the Cut-Off Date or Tax Cut-Off
Date, as applicable, or (b) of which the Buyer has been notified in writing
pursuant to Section 6.4 by the Securityholders prior to the Cut-Off Date. The
right to indemnification, payment of Losses or other remedy based on such
representations, warranties, covenants and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, or with respect to, the
accuracy or inaccuracy of or compliance with, any such representation, warranty,
covenant or obligation.

     6.2 INDEMNIFICATION OF THE BUYER. Subject to the other terms of this
Article 6, from and after the Closing, the cash retained by the Escrow Agent
pursuant to the Escrow Agreement shall be available to indemnify the Buyer and
hold it harmless against and in respect of any and all claims, damages, losses,
expenses, costs, obligations


                                       39



and liabilities, including, without limitation, reasonable attorney's fees
(collectively, "LOSSES"), of the Buyer, the Company and its Subsidiaries, which
arise or result from (a) any breach of any of the representations or warranties
contained in Article 2 or contained in any certificate delivered at the Closing
by the Company pursuant to this Agreement or as contemplated by the following
sentence, (b) the failure of the Company to perform any of its covenants or
agreements contained herein, (c) the failure of the Trigger Event Cash Bonuses
to be paid, (d) any payments required to be made to holders of Dissenting Shares
in accordance with Section 1.10 (such obligations being referred to herein as
the Securityholders' indemnification obligations) or (e) Pre-Closing Taxes, to
the extent that they exceed amounts of Taxes reflected as a current liability on
the Closing Balance Sheet. For purposes of this Section 6.2, the Company shall
be deemed to have represented and warranted that the representations and
warranties of the Company in Section 2 are true and correct at and as of the
Closing Date as if then made (except to the extent addressing matters as of
particular dates, as to which it shall be deemed to state that such
representations and warranties are true and correct as of such dates), except to
the extent the certificate delivered pursuant to Section 6.1(c) identifies
failures of such representations and warranties to be true and correct at and as
of the Closing Date (or such other dates) as though then made and states that
such failure has caused the condition in Section 5.1(a) not to be satisfied. The
Securityholders' indemnification obligations under this Agreement, however,
shall be subject to the following limitations and conditions:

               (i) (A) with respect to Losses described under clause (a) above
or, to the extent arising from the breach of Section 4.2(a)(iii), clause (b)
above, the Securityholders shall have no indemnification obligation with respect
to any single Loss (or series of similar or related Losses or Losses arising
from similar actions or states of fact) of less than $150,000; and (B) with
respect to Losses described under clause (a) above (except to the extent related
to Section 2.9) or, to the extent arising from the breach of Section
4.2(a)(iii), clause (b) above, the Securityholders shall have no indemnification
obligation unless, and only to the extent that, the cumulative amount of Losses
incurred by the Buyer (excluding Losses for which indemnification would not be
available as a result of failure to meet the $150,000 threshold specified above)
exceeds $5,000,000;

               (ii) the Securityholders' cumulative liability for
indemnification payments with respect to Losses described under clauses (a)
(except to the extent related to Section 2.9), (b), (c) and (d) above shall not
exceed, in the aggregate, and shall be payable solely from, the General Escrow
Funds; the Securityholders' cumulative liability for indemnification payments
with respect to Losses described in clauses (a) (to the extent relating to
Section 2.9) and (e) above shall not exceed, in the aggregate, and shall be
payable solely from, the Tax Escrow Funds;

               (iii) the Securityholders shall have no indemnification
obligation with respect to Losses relating to Environmental Laws, Environmental
Claims or any breach of the representations and warranties contained in Section
2.22 to the extent such Losses represent amounts incurred by the Company or any
Subsidiary for the performance of remedial action (A) that was not ordered by
any court or governmental agency or in reasonable settlement (made in accordance
with this Agreement) of a claim


                                       40



of noncompliance with any Environmental Laws asserted by any governmental agency
and (B) would not be undertaken by a reasonable business person similarly
situated;

               (iv) the Securityholders shall have no indemnification obligation
with respect to Losses arising out of a breach of the representations and
warranties contained in Article 2 arising out of claims for malpractice or
professional liability brought against the Company or a Subsidiary between the
date hereof and the Closing Date to the extent such Losses do not exceed the
excess of (x) the reserve on the Balance Sheet for malpractice or professional
liability over (y) the amount of such reserve necessary to cover claims for
malpractice or professional liability disclosed on Schedule 2.14 hereto.

               (v) the Securityholders shall have no indemnification obligation
for consequential damages that are not reasonably foreseeable or for punitive or
exemplary damages, special damages or other similar items, except to the extent
amounts in respect of any such type of damages are paid or payable to a third
party in respect of a claim by it.

     In determining the foregoing thresholds and in otherwise determining the
amount of any Losses for which the Buyer is entitled to assert a claim for
indemnification hereunder, the amount of any such Losses shall be determined
after deducting therefrom the amount of any insurance proceeds (after giving
effect to any applicable deductible or retention and resulting retrospective
premium adjustment) or other third party recoveries actually received by the
Buyer, the Company or any Subsidiary in respect of such Losses (which insurance
proceeds the Buyer and the Company agree to use, or to cause any such Subsidiary
to use, commercially reasonable efforts to obtain) and the amount of any tax
benefit related thereto. If an indemnification payment is received by the Buyer,
and the Buyer, the Company or any Subsidiary later receives insurance proceeds,
other third party recoveries or tax benefits in respect of the related Losses,
the Buyer shall immediately pay to the Agent, as Agent for the Securityholders,
a sum equal to the lesser of (y) the actual amount of such insurance proceeds,
other third party recoveries and tax benefits or (z) the actual amount by which
the indemnification payment previously paid by the Securityholders with respect
to such Losses would have been reduced had such proceeds been collected prior to
the determination thereof.

     6.3 INDEMNIFICATION OF SECURITYHOLDERS. Subject to the other terms of this
Article 6, from and after the Closing, the Buyer and the Company agree to
indemnify the Securityholders and hold the Securityholders harmless against and
in respect of any and all Losses which arise or result from any (a) breach of
any of the Buyer's representations and warranties, (b) the failure of the Buyer
to perform any of its covenants or agreements set forth herein or (c) the
failure of the Company or any Subsidiary to perform any covenant or agreement
set forth herein which by its terms is to be performed after the Closing.


                                       41



     6.4 PROCEDURE FOR INDEMNIFICATION.

          (A) Any party making a claim for indemnification hereunder shall
promptly notify the indemnifying party of the claim in writing, describing the
claim in reasonable detail, the estimated amount thereof (to the extent known
and quantifiable) , and the basis therefor; provided, that the failure to
provide prompt notice shall not relieve the indemnifying party of its
indemnification obligations hereunder, except to the extent that the
indemnifying party is actually prejudiced by the failure to give such prompt
notice.

          (B) If a claim for indemnification hereunder is based on a claim by a
third party, the indemnifying party shall have the right to assume the entire
control of the defense thereof, including at its own expense, employment of
counsel reasonably satisfactory to the indemnified party, and, in connection
therewith, the party claiming indemnification shall cooperate fully with the
reasonable requests of the indemnifying party and make available to the
indemnifying party all pertinent information under its control reasonably
requested by the indemnifying party; provided, that the indemnified party may
participate in any proceeding with counsel of its choice at its expense.
Notwithstanding the foregoing, the indemnifying party shall not have the right
to assume or continue to control the defense (i) if the indemnifying party fails
to defend the proceeding in good faith, or (ii) if, in the case of the
Securityholders as the indemnifying party, the amount of Escrow Funds held under
the Escrow Agreement available at such time to satisfy any potential
indemnification with respect to such proceeding is less than the lesser of $5
million and the amount of the claim related to such proceedings. If the
indemnifying party assumes the defense of a proceeding, (x) no compromise or
settlement of any such claim may be effected by the indemnifying party without
the indemnified party's consent unless (1) there is no finding or admission of
any violation of any law or any violation of the rights of any Person and no
effect on any other claims that may be made against the indemnified party, and
(2) the sole relief provided is monetary damages that (A) if the indemnifying
party is the Securityholders, after giving effect to the applicable limits in
subsection 6.2, at least 51% of which are paid in full by the amounts remaining
in the Escrow Funds at the time of such settlement that are not subject to a
separate indemnity claim by Buyer at such time and (B) if the indemnifying party
is the Buyer, the damages are paid in full by the Buyer; and (y) the
indemnifying party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. This Section 6.4(b) does
not relate to indemnification with respect to the matters set forth in Section
2.9 or Pre-Closing Taxes.

     6.5 REMEDIES EXCLUSIVE. The remedies provided in this Article 6 shall be
the exclusive remedies of the parties hereto after the Closing for monetary
damages in connection with the transactions contemplated by this Agreement
(other than for fraud or pursuant to Section 1.9), including, without
limitation, any breach or non-performance of any representation, warranty,
covenant or agreement contained herein. No party may commence any suit, action
or proceeding against any other party hereto or any of their respective
Affiliates with respect to the subject matter of this Agreement, whether in
contract, tort or otherwise, except to enforce such party's express rights under
this Article 6.


                                       42



                                    ARTICLE 7
                                   TERMINATION

     7.1 TERMINATION. Notwithstanding anything contained in this Agreement to
the contrary, this Agreement may be terminated prior to the Closing:

          (A) by mutual written consent of the Company and the Buyer;

          (B) by the Buyer, if satisfaction of the conditions set forth in
Section 5.1(a) or 5.1(b) has become impossible;

          (C) by the Company, if satisfaction of the conditions set forth in
Sections 5.2(a) or 5.2(b) has become impossible;

          (D) by either the Company or the Buyer, if any court or Governmental
Authority has issued a final and non-appealable order, decree or ruling
permanently restraining, enjoining or otherwise prohibiting the consummation of
the Merger;

          (E) by the Buyer, if the consent referred to in the second
introduction paragraph to this Agreement shall not have been executed and become
effective within 24 hours after the execution and delivery of this Agreement; or

          (F) by either the Company or the Buyer, if the Closing has not
occurred by February 10, 2006, which date will be automatically extended for up
to 60 days if conditions to Closing are not then satisfied solely as a result of
the failure to obtain regulatory approvals that remain pending, or such other
date, if any, as the Company and the Buyer may agree in writing.

     7.2 EFFECT OF TERMINATION.

          (A) If this Agreement is terminated as provided above, the parties
shall have no further obligations hereunder (including, without limitation, for
costs and expenses incurred by other parties in connection with this Agreement
and the transactions contemplated hereby), except as provided below and except
that each party shall be liable for its willful breach of this Agreement and the
other parties hereto shall be entitled to all rights and remedies provided by
law in respect of such breach.

          (B) The obligations of the Buyer under Section 4.1(b) shall survive
the termination of this Agreement.

                                    ARTICLE 8
                                  MISCELLANEOUS

     8.1 NOTICES. All notices and communications to a party hereunder shall be
made in writing and shall be deemed to have been adequately given if (a)
delivered in person (in a manner through which delivery may be verified), (b)
sent by nationally recognized overnight delivery service or (c) mailed,
certified mail, return receipt


                                       43



requested, to such party at its address set forth below (or such other address
as it may from time to time designate in writing to the other parties hereto):

     If to the Company, to:

               Skilled Healthcare Group, Inc.
               27442 Portola Parkway, Suite 200
               Foothill Ranch, California 92610
               Attn: Chief Executive Officer

               with copies (which shall not constitute notice) to:

               the Agent

               and

               Choate, Hall & Stewart LLP
               Two International Place
               Boston, Massachusetts 02110
               Attn: Stephen M. L. Cohen

     If to the Agent or the Warrantholders, to:

               c/o Heritage Partners, Inc.
               30 Rowes Wharf, Suite 300
               Boston, Massachusetts 02110
               Attn: Mark Jrolf

               with a copy (which shall not constitute notice) to:

               Choate, Hall & Stewart LLP
               Two International Place
               Boston, Massachusetts 02110
               Attn: Stephen M. L. Cohen

     If to the Buyer or, after the Closing, the Company, to:

               Onex Partners Manager L.P.
               712 Fifth Avenue
               New York, New York 10019
               Attn: Robert M. LeBlanc

               with a copy (which shall not constitute notice) to:

               Kaye Scholer LLP
               425 Park Avenue


                                       44



               New York, New York 10022
               Attn: Joel I. Greenberg

     8.2 NO WAIVER. No failure of any party to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder.

     8.3 AMENDMENTS AND WAIVERS. This Agreement may be modified, amended or
waived only by a writing signed by (a) the Buyer, (b) prior to the Closing, the
Company and (c) the Agent.

     8.4 CHOICE OF LAW; FORUM. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without regard to
the choice of law provisions thereof. Each party to this Agreement irrevocably
submits to the exclusive jurisdiction of the Chancery Court of the State of
Delaware and the United States District Court for the District of Delaware in
connection with any action or proceeding arising out of or relating to this
Agreement. Any process in any such action or proceeding may be served on the
parties hereto anywhere in the world in any manner provided by law or as
provided in Section 8.1.

     EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN CONNECTION WITH ANY MATTER ARISING OUT OF THIS AGREEMENT AND, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY DEFENSE OR OBJECTION IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY PROCEEDING UNDER THIS AGREEMENT
BROUGHT IN THE CHANCERY COURTS OF THE STATE OF DELAWARE OR THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF DELAWARE AND ANY CLAIM THAT ANY PROCEEDING
UNDER THIS AGREEMENT BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

     8.5 BINDING EFFECT AND BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective heirs, successors
and assigns, but may not be assigned by any party without the prior written
consent of the other parties hereto, except that (a) the indemnification and
other rights hereunder of a party may be assigned to any bank or other financial
institution which is or becomes a lender to the Buyer or any of its successors
and assigns and (b) this Agreement may be assigned by the Buyer to any of its
wholly-owned subsidiaries as long as the Buyer remains jointly and severally
liable with the assignee hereunder.

     8.6 INTEGRATION; SCHEDULES. This writing, together with the Exhibits and
Schedules attached hereto, embodies the entire agreement and understanding among
the parties with respect to this transaction and supersedes all prior
discussions, understandings and agreements concerning the matters covered
hereby, except as set forth in Section 4.1(b). Information set forth on any
Schedule shall be deemed to qualify each other section of this Agreement to
which such information is applicable (regardless


                                       45



of whether or not such other section is qualified by reference to a Schedule),
so long as application to such section is reasonably discernible from the
reading of such disclosure. No information set forth on any Schedule shall be
deemed to broaden in any way the scope of the Company's representations and
warranties. The inclusion of any item on a Schedule is not evidence of the
materiality of such item for purposes of the Agreement, or that such item is a
disclosure required under the Agreement. Any description of any agreement,
document, instrument, plan, arrangement or other item set forth in a Schedule is
a summary only and is qualified in its entirety by the terms of such agreement,
document, instrument, plan, arrangement or item, copies of which have been made
available to the Buyer. No disclosure in any Schedule relating to any possible
breach or violation of any agreement, law or regulation shall be construed as an
admission or indication that any such breach or violation exists or has actually
occurred, or shall constitute an admission of liability to any third party.

     8.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and counterparts by facsimile, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.

     8.8 LIMITATION ON SCOPE OF AGREEMENT. If any provision of this Agreement is
unenforceable or illegal, such provision shall be enforced to the fullest extent
permitted by law and the remainder of the Agreement shall remain in full force
and effect.

     8.9 HEADINGS. The headings of Articles and Sections herein are inserted for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

     8.10 EXPENSES. All legal and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, except as otherwise
expressly provided herein. The Company shall not, prior to the Closing, be
required to pay any out-of-pocket expenses with respect to Buyer's obtaining the
financing contemplated by the CSFB Commitment.

     8.11 NO THIRD PARTY BENEFICIARIES. Except as otherwise expressly set forth
in this Agreement, nothing in this Agreement will be construed as giving any
person, other than the parties hereto and their respective heirs, successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof. No employee of the Company or any Subsidiary
shall be a third party beneficiary or entitled to rely on Section 4.12.

     8.12 FURTHER ASSURANCES. Following the Closing, the parties shall execute
and deliver to each other such documents and take such other actions as may
reasonably be requested in order to consummate more effectively the transactions
contemplated hereby.

     8.13 "KNOWLEDGE" DEFINED. As used herein, "to the knowledge of the
Company," "to the Company's knowledge," or any other similar phrase shall mean
the


                                       46



actual knowledge of Boyd W. Hendrickson, John E. King, Jose C. Lynch, Roland G.
Rapp and Mark Wortley.

     8.14 PUBLICITY. Pending the Closing, no party shall issue a press release
or make any other public announcement concerning the transactions contemplated
by this Agreement without the prior written consent of the Company and the
Buyer, except to the extent required by law, in which case the other party shall
have the opportunity to review and comment prior to disclosure.

     8.15 NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other agreements and
documents contemplated herein. In the event an ambiguity or question of intent
or interpretation arises under any provision of this Agreement or any other
agreement or documents contemplated herein, this Agreement and such other
agreements or documents shall be construed as if drafted jointly by the parties
thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authoring any of the provisions of this
Agreement or any other agreements or documents contemplated herein.

     8.16 PROVISIONS CONCERNING AGENT. The Agent shall be authorized (a) in
connection with the Closing, to execute and deliver all certificates, documents
and agreements on behalf of and in the name of the Securityholders and the
Company necessary to effectuate the Closing and related transactions, (b) to
negotiate, execute and deliver all amendments, modifications and waivers to this
Agreement or any other agreement, document or instrument contemplated by this
Agreement and (c) to receive on behalf of the Securityholders any payments due
from Buyer hereunder, including pursuant to Sections 1.8 and 1.9 and Article 6
hereof, and shall be responsible to distribute the same to the Persons entitled
thereto, and delivery by the Buyer to the Agent of any such payments shall
satisfy in full Buyer's obligations and forever discharge Buyer's liabilities
with respect thereto; provided, however, that if the effect of any such
amendment, modification or waiver on the Securityholders (other than the
Warrantholders and their Affiliates) is different in any material and adverse
respect from the effect on the Warrantholders and their Affiliates, then the
prior written consent of a majority-in-interest of such Securityholders
(determined based upon the number of shares of Common Stock held by such
Securityholders and assuming the exercise or conversion of all Company
Securities into Common Stock) shall also be required for such amendment,
modification or waiver. The Agent shall also be authorized to take all actions
on behalf of the Securityholders in connection with any claims under Article 6
of this Agreement, to initiate, prosecute, defend and/or settle such claims, and
to make payments in respect of any claims brought against the amounts held by
Escrow Agent in the Escrow Fund. The Agent will not receive a fee for serving as
the agent of the Securityholders hereunder. The Agent shall be entitled to
engage counsel and other advisors and the reasonable fees and expenses of such
counsel and advisors may be paid from the Agent Fund. The Agent shall not be
liable to any Securityholder for any action taken by it pursuant to this
Agreement, and the Securityholders shall jointly and severally indemnify and
hold the Agent harmless from any Losses arising out of it serving as agent
hereunder, except in each case if and to the extent the Agent has engaged in bad
faith or willful misconduct. The Agent is serving in that capacity solely for
purposes of


                                       47



administrative convenience, and is not personally liable for any of the
obligations of the Securityholders hereunder, and the Buyer, the Merger Sub and
the Company agree that they will not look to the underlying assets of the Agent
for the satisfaction of any obligations of the Company or Securityholders (or
any of them). The Agent may resign as agent of the Securityholders hereunder,
effective only upon appointment of a replacement agent with the prior written
consent of a majority-in-interest of the Securityholders. All rights of the
Agent to indemnification hereunder shall survive the resignation or removal of
the Agent.

                                    ARTICLE 9
                                   DEFINITIONS

     The following terms, as used in this Agreement, have the meanings given to
them in the section or place indicated below:



                                           SECTION OR PLACE
TERM:                                       WHERE DEFINED:
- -----                                      ----------------
                                        
Actions                                    Section 2.14
Affiliate                                  Section 3.8
Agent                                      Preamble
Agent Fund                                 Section 1.8
Agreement                                  Preamble
Authorizations                             Section 2.16
Balance Sheet                              Section 2.7
Balance Sheet Date                         Section 2.7
Benefit Plans                              Section 2.19
Buyer                                      Preamble
Buyer Stock Purchase Agreement             Section 1.6
Certificate of Merger                      Section 1.2
CSFB Commitment                            Section 3.6
Closing                                    Section 1.2
Closing Date                               Section 1.2
Closing Date Distributable Amount          Section 1.6
Closing Merger Consideration               Section 1.6
Closing Merger Consideration Certificate   Section 1.6
Closing Tax Benefit                        Section 1.6
Code                                       Section 2.19
Common Equivalent Shares                   Section 1.10
Common Stock                               Section 1.6
Company                                    Preamble
Company Charter Documents                  Section 2.1
Company Intellectual Property              Section 2.12
Company Material Adverse Effect            Section 2.5
Company Securities                         Section 1.6
Credit Fees                                Section 1.6
Cut-Off Date                               Section 6.1



                                       48



                                        
DGCL                                       Introduction
Dispute Resolution Auditor                 Section 1.9
Dissenting Shares                          Section 1.11
Effective Time                             Section 1.2
Environment                                Section 2.22
Environmental Claim                        Section 2.22
Environmental Laws                         Section 2.22
ERISA                                      Section 2.19
ERISA Affiliate                            Section 2.19
Escrow Agent                               Section 1.6
Escrow Agreement                           Section 1.6
Facility Sale Proceeds                     Section 1.6
Financial Statements                       Section 2.7
First Lien Credit Agreement                Section 1.6
GAAP                                       Section 2.7
General Escrow Fund                        Section 1.6
Government Programs                        Section 2.23
Governmental Authority                     Section 2.14
Guarantor                                  Preamble
Hazardous Substances                       Section 2.22
Health Care Claim                          Section 2.23
Health Care Laws                           Section 2.23
HSR Act                                    Section 4.5
Indebtedness                               Section 1.6
Indemnified Persons                        Section 4.8
Intellectual Property                      Section 2.12
Knowledge                                  Section 8.13
Lease                                      Section 2.11
Leased Real Property                       Section 2.11
Lender                                     Section 3.6
Letter of Transmittal                      Section 1.12
Liens                                      Section 2.8
Losses                                     Section 6.2
Material Contracts                         Section 2.13
Merger                                     Introduction
Merger Sub                                 Preamble
Objections Statement                       Section 1.9
Options                                    Section 1.6
Owned Property                             Section 2.11
Permitted Liens                            Section 2.10
Per-Share Amount                           Section 1.10
Pre-Closing Covenants                      Section 6.1
Pre-Closing Taxes                          Section 2.9
Proceeding                                 Section 4.8
Qualifying Buyer                           Section 3.6
Rollover Cash Amount                       Section 1.6




                                       49



                                        
Rollover Share Amount                      Section 1.6
Rollover Shares                            Section 1.6
Sale Bonus Payments                        Section 1.6
Second Lien Credit Agreement               Section 1.6
Section 280G Payment                       Section 2.9
Securityholders                            Section 1.6
Sellers                                    Section 1.6
Service                                    Section 2.19
Shareholders Agreement                     Section 5.1
Specified Facilities                       Section 1.6
Stock Certificates                         Section 1.6
Straddle Period                            Section 2.9
Subsidiary                                 Section 2.4
Surviving Corporation                      Section 1.1
Tax or Taxes                               Section 2.9
Tax Cut-Off Date                           Section 6.1
Tax Dispute Resolution Auditor             Section 1.9(b)
Tax Escrow Fund                            Section 1.6
Tax Returns                                Section 2.9
Trigger Event Cash Bonus Agreements        Section 1.6
Trigger Event Cash Bonus Payments          Section 1.10
WARN                                       Section 2.18
Warrant Certificate                        Section 1.12
Warrantholders                             Preamble
Warrants                                   Section 1.6



           [The remainder of this page is intentionally left blank.]


                                       50



     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.

BUYER:                                  COMPANY:

SHG HOLDING SOLUTIONS, INC.             SKILLED HEALTHCARE GROUP, INC.


By                                      By
   ----------------------------------      -------------------------------------
   (title)                                 (title)


MERGER SUB:                             WARRANTHOLDERS:
                                        (Solely for purposes of Sections 1.7,
SHG ACQUISITION CORP.                   1.10, 1.12 and Article 6)

                                        HERITAGE FUND II, L.P.
                                        By HF Partners II, L.L.C.,
                                           its general partner


By
   ----------------------------------
   (title)


                                        By
                                           -------------------------------------
                                                          Manager


                                        HERITAGE INVESTORS, II, L.L.C.


                                        By
                                           -------------------------------------
                                                          Manager

                      [SIGNATURE PAGE TO MERGER AGREEMENT]



                                        By its signature below, the undersigned
                                        agrees to (i) serve as the Agent for the
                                        Sellers in accordance with Section 8.16
                                        and (ii) take all steps necessary to
                                        exercise its rights under Section 4.02
                                        of the Shareholders' Agreement with
                                        respect to the Merger and to cause each
                                        party thereto to take all actions
                                        required of them under Section 4.03 of
                                        the Shareholders Agreement including,
                                        inter alia, to vote or consent to the
                                        adoption of this Agreement and to not
                                        seek appraisal under Delaware law (and
                                        is not signing this Agreement for any
                                        other purpose):

                                        HERITAGE PARTNERS MANAGEMENT COMPANY,
                                        LLP


                                        By
                                           -------------------------------------
                                           (title)

                      [SIGNATURE PAGE TO MERGER AGREEMENT]

EX-2.2

Exhibit 2.2

AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER

     This Amendment No. 1 (this “Amendment”) to the Agreement and Plan of Merger (the “Agreement”) dated as of October 22, 2005 by and among Skilled Healthcare Group, Inc., a Delaware corporation (the “Company”), SHG Holding Solutions, Inc., a Delaware corporation (“Buyer”), Heritage Partners Management Company, LLP (the “Agent”), and Heritage Fund II, L.P., a Delaware limited partnership and Heritage Investors II, L.L.C., a Delaware limited liability company (collectively, the “Warrantholders”), solely with respect to Sections 1.7, 1.9, 1.11 and Article 6 relating to the Warrants, is entered into effective as of December ___, 2005 by and among Buyer, Company and Agent. Capitalized terms used herein and not otherwise defined shall have the respective meanings given to them in the Agreement.

Introduction

     WHEREAS, in connection with the Closing, Agent has distributed to all Securityholders a letter of transmittal in the form of Exhibit A hereto that includes a substitute Form W-9 containing a certification of non-foreign status (the “Non-Foreign Certification”);

     WHEREAS, the parties wish to facilitate withholding on distributions to Securityholders who have not provided a Non-Foreign Certification; and

     WHEREAS, Buyer, Company and Agent, acting in accordance with Sections 8.3 and 8.16 of the Agreement, wish to amend the Agreement as set forth below;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. Amendment to Section 1.10(f). Section 1.10(f) of the Agreement is hereby amended by adding the following new sentences after the first sentence thereof:

“Without limiting the generality of the foregoing, Agent shall not distribute any amounts or payments to any Securityholder who has not previously submitted an executed Non-Foreign Certification unless Agent shall have first remitted 10% of the amount to be distributed to such Securityholder, including 10% of such Securityholder’s pro rata portion of the General Escrow Fund and the Tax Escrow Fund (the “Specified Amount”), to the Surviving Corporation to enable the Surviving Corporation to make withholding tax payments to the applicable tax or other authorities (such obligation of Agent under this sentence being referred to herein as the “Agent’s Foreign Person Obligation”). As soon as practicable, but in no event later than three days following receipt by the Surviving Corporation of the Specified Amount from Agent, the Surviving Corporation shall apply such Specified Amount to make the required withholding tax payments to the applicable tax or other authorities in satisfaction of any requirements to withhold and pay any such amounts pursuant to Section 1445 of the Code (such obligation

of Surviving Corporation being referred to herein as the “Surviving Corporation’s Withholding Obligation”).”

     2. Indemnification. The following new Section 6.5 is hereby added to the Agreement (and the section previously numbered 6.5 is hereby renumbered as Section 6.6):

     “6.5 Indemnification for Foreign Person Withholding.

     (a) From and after the Closing, Agent, on behalf of the Securityholders, shall indemnify Buyer and Surviving Corporation and hold them harmless against and in respect of any and all Losses of Buyer and Surviving Corporation that arise or result from any obligation of Buyer pursuant to Section 1445 of the Code (and the Treasury Regulations issued thereunder) to withhold and remit any portion of the Closing Merger Consideration payable to or for the benefit of any Securityholder who has not, on or before the Closing Date submitted to Buyer an executed Non-Foreign Certification; provided, however, that Agent shall have no such obligation to indemnify Buyer and Surviving Corporation if such Losses result from Surviving Corporation’s failure to comply with Surviving Corporation’s Withholding Obligation. Notwithstanding anything to the contrary contained in this Agreement, (i) the indemnification obligation contained in this Section 6.5(a) shall survive the Closing and (ii) in addition to Agent’s direct indemnification obligation (on behalf of the Securityholders) to Buyer and Surviving Corporation under this Section 6.5(a), the cash retained by the Escrow Agent pursuant to the Escrow Agreement shall be available to indemnify Buyer and Surviving Corporation for any Losses to which they are entitled to indemnification under this Section 6.5(a) without regard to the limitations contained in Section 6.2 or the procedures contained in Section 6.4(b).

     (b) From and after the Closing, Buyer and the Surviving Corporation shall indemnify the Securityholders and hold them harmless against and in respect of any and all Losses of the Securityholders which arise or result from any failure by the Surviving Corporation to comply with Surviving Corporation’s Withholding Obligation. Notwithstanding anything to the contrary contained in this Agreement, the indemnification obligation contained in this Section 6.5(b) shall survive the Closing and not be subject to the procedures contained in Section 6.4(b).

     (c) After the Closing, (i) Agent shall promptly provide to Buyer and Surviving Corporation copies of any Non-Foreign Certifications received by Agent from Securityholders after the Closing Date and (ii) Buyer and Surviving Corporation shall promptly provide to Agent any correspondence, filings, tax returns or other documents or reports relating to Buyer’s and Surviving Corporation’s payment to any taxing authority of any Specified Amounts.”

     3. Miscellaneous. This Amendment may be executed in one or more counterparts and may be delivered via facsimile, each of which shall be deemed an original and all of which taken together shall constitute one and the same Amendment. Except to the extent specifically

-2-

amended hereby, the Agreement shall be unaffected hereby and shall remain in full force and effect. Each of the parties hereto hereby acknowledges, confirms and ratifies its respective obligations under the Agreement. The parties hereto acknowledge and confirm that for all purposes of the Agreement, the term “Agreement” shall mean the Agreement as amended by and through the date of this Amendment and as further amended and from time to time hereafter.

[ The remainder of this page is intentionally left blank. ]

-3-

     IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed as a sealed instrument as of the date first above written.

BUYER:		COMPANY:
SHG HOLDING SOLUTIONS, INC.		SKILLED HEALTHCARE GROUP, INC.
By		By
	(title)		(title)
AGENT:
HERITAGE PARTNERS MANAGEMENT COMPANY, LLP
By
	(title)

EX-2.3

                                                                     Exhibit 2.3

                                                                  EXECUTION COPY

                            ASSET PURCHASE AGREEMENT

      This Asset Purchase Agreement (the "AGREEMENT") is entered into as of
January 31, 2006 by and among Skilled Healthcare Group, Inc., a Delaware
corporation, (the "PURCHASER"), each of the entities listed on SCHEDULE 2.1
hereto (individually, a "COMPANY" and collectively, the "COMPANIES"), M. Terence
Reardon and M. Sue Reardon individually and, as Trustees of the M. TERENCE
REARDON TRUST U.T.A. dated 6/26/2003 and M. Sue Reardon and M. Terence Reardon,
as Trustees of the M.SUE REARDON TRUST U.T.A. dated 6/26/2003 (together the
"BENEFICIAL OWNERS," and together with the Companies, the "SELLERS"). The
parties acknowledge that the Purchaser may assign its rights hereunder to one or
more Affiliates, and references herein to "Purchaser" shall include any such
assignees.

                                  INTRODUCTION

      The Beneficial Owners collectively own all of the outstanding membership
and equity interests (the "EQUITY INTERESTS") of the Companies. The Sellers wish
to sell, and the Purchaser wishes to buy, substantially all of the assets of the
Companies, on the terms and conditions set forth herein. The Beneficial Owners
are the direct and indirect owners of the Companies, will derive substantial
benefits from such sale and purchase, and wish to cause such sale and purchase
to be consummated. Such sale and purchase and each other related transaction
referred to herein are sometimes collectively referred to herein as the
"TRANSACTIONS".

      This Agreement is being made contemporaneously with the Consulting
Agreement between Carmel Hills Healthcare and Rehabilitation Center, LLC., a
Delaware limited liability company; Holmesdale Healthcare and Rehabilitation
Center, LLC, a Delaware limited liability company; Liberty Terrace Healthcare
and Rehabilitation Center, LLC, a Delaware limited liability company; Purchaser;
Sunset Healthcare, Inc., a Missouri corporation; and, with respect to certain
sections only, Edward J. Reardon (the "CONSULTING AGREEMENT").

      An index of defined terms used herein is set forth in ARTICLE 10.

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

                                   ARTICLE 1.
                           THE TRANSACTIONS; CLOSING

      1.1   PURCHASE AND SALE OF PURCHASED ASSETS. In reliance upon the
representations and warranties contained herein, and subject to the terms and
conditions hereof, each of the Companies shall sell, convey, transfer, assign
and deliver to the Purchaser at the Closing (as hereinafter defined), free and
clear of all liens, security interests, deeds or indentures of trust, mortgages,
encumbrances and restrictions, all of its assets and properties of every kind,
nature and description except as otherwise provided below (all of such assets
being referred to herein as the "PURCHASED ASSETS"), including without
limitation the following assets of the Companies:

            (a)   all Owned Property (as defined);

            (b)   all tangible assets, including without limitation machinery
and equipment, furniture, office equipment, leasehold improvements, fixtures and
other improvements on real estate (collectively, the "IMPROVEMENTS"), and all
inventories (including without limitation linens and purchased parts and
supplies);

            (c)   originals or duplicate copies of all financial, accounting and
operating data and records, including without limitation all books, records,
notes, sales and sales promotional data, advertising materials, credit
information, cost and pricing information, customer and supplier lists, business
plans, projections, reference



catalogs, payroll and personnel records to the extent allowed by law, and other
similar property, rights and information;

            (d)   all Company Intellectual Property (as hereinafter defined) to
the extent assignable or transferable; and

            (e)   all rights under all leases, license agreements, contracts,
agreements, sale orders, purchase orders, open bids and other commitments, but
only to the extent they pertain to the operating contracts specifically assumed
by the Purchaser under the Operations Transfer Agreement (the "ASSUMED OPERATING
CONTRACTS").

      1.2   EXCLUDED ASSETS. Notwithstanding the foregoing, the Companies shall
not transfer to the Purchaser, and the Purchased Assets shall not include (i)
the Companies' rights under this Agreement; (ii) cash, (iii) accounts
receivables, (iv) any contracts other than the Assumed Operating Contracts and
(v) any assets set forth on SCHEDULE 1.2 (collectively, the "EXCLUDED ASSETS").

      1.3   PURCHASE PRICE.

            (a)   The term "PURCHASE PRICE" means an aggregate of Thirty-One
Million Dollars ($31,000,000).

            (b)   At the Closing, Seller has and will transfer to Purchaser good
and marketable fee simple title to all Owned Real Property free and clear of all
encumbrances, except for (i) minor liens which in the aggregate are not
substantial in amount, do not materially detract from the value or
transferability of the property or assets subject thereto or interfere with the
present use and have not arisen other than in the ordinary course of business,
and (ii) those items listed on Schedule 1.3(b) (collectively "PERMITTED
ENCUMBRANCES").

            (c)   PAYMENT AT SIGNING. Upon the execution of this Agreement by
all of the parties, an earnest money deposit in the amount of Five Hundred
Thousand Dollars ($500,000) (the "DEPOSIT") shall be delivered by the Purchaser
to Chicago Title Insurance Company (the "ESCROW AGENT"). Escrow Agent shall hold
and dispose of the Deposit in accordance with the terms of this Agreement.
Sellers and Purchaser agree that the duties of the Escrow Agent hereunder are
purely ministerial in nature and shall be expressly limited to the safekeeping
and disposition of the Deposit in accordance with this Agreement. Escrow Agent
shall incur no liability in connection with the safekeeping or disposition of
the Deposit for any reason other than Escrow Agent's willful misconduct or gross
negligence. If Escrow Agent is in doubt as to its duties or obligations with
regard to the Deposit, or if Escrow Agent receives conflicting instructions from
Purchaser and the Sellers with respect to the Deposit, then Escrow Agent shall
not be required to disburse the Deposit and may, at its option, continue to hold
the Deposit until Purchaser and Sellers agree as to its disposition, or until a
final judgment is entered by a court of competent jurisdiction directing its
disposition, or Escrow Agent may interplead the Deposit in accordance with the
laws of the state in which the Property is located. Escrow Agent shall not be
responsible for any interest on the Deposit except as is actually earned, or for
the loss of any interest resulting from the withdrawal of the Deposit prior to
the date interest is posted thereon. Escrow Agent shall execute this Agreement
solely for the purpose of being bound by the provisions of Sections 1.3(c) and
7.2 hereof. Escrow Agent's General Provisions are attached hereto as Exhibit
1.3(c) and made a part hereof.

            (d)   PAYMENTS AT CLOSING. At the Closing, the Purchaser shall pay
to the Companies an amount, in the aggregate, equal to the Purchase Price (i)
less the Deposit, and (ii) less the Medicaid Escrow Amount by wire transfer of
immediately available funds. The "MEDICAID ESCROW AMOUNT" shall be an amount
equal to Ninety Thousand Dollars ($90,000) which Purchaser, at the Closing,
shall deposit into the Medicaid escrow account with Chicago Title Insurance
Company (the "MEDICAID ESCROW AGENT") such amount constituting Thirty Thousand
Dollars ($30,000) for each of the Acquired Facilities pursuant to the Medicaid
escrow agreements between each of Holmesdale Care Center, Inc., Carmel Hills
Living Center, Inc., and Liberty Terrace Nursing, LLC, and Purchaser and the
Medicaid Escrow Agent (each a "MEDICAID ESCROW AGREEMENT" and collectively, the
"MEDICAID ESCROW AGREEMENTS").

                                       2



      1.4   ASSUMPTION OF LIABILITIES. At the Closing, the Purchaser shall
assume and agree to pay when due, perform and discharge in accordance with the
terms thereof, only those liabilities and obligations of the Company for future
performance as of the Closing under the Assumed Operating Contracts (the
"ASSUMED LIABILITIES"). Except with respect to the Assumed Liabilities, the
Purchaser shall not assume and shall not in any way be responsible for any of
the debts, liabilities, or obligations of any nature of the Companies. Without
limiting the generality of the foregoing, the Purchaser shall have no liability
for the following (collectively, together with all other liabilities and
obligations of the Companies other than the Assumed Liabilities, the "EXCLUDED
LIABILITIES"):

            (a)   the outstanding amount of all principal, interest, fees and
expenses in respect of borrowed money, letters of credit, capital leases and
installment purchases (except as may be provided in the Assumed Operating
Contracts but only to the extent that such obligation relates to a period after
the Closing);

            (b)   obligations relating to Taxes related to the period prior to
Closing, including, but not limited to, Taxes owed by the Sellers associated
with the Closing, (for purposes hereof, "TAXES" means all taxes, charges, fees,
levies, penalties, additions or other assessments imposed by any federal, state,
or local taxing authority, including, but not limited to, income, excise,
property, sales, transfer, franchise, payroll, withholding, value added, social
security or other taxes, including any interest, penalties or additions
attributable thereto);

            (c)   obligations under this Agreement or any agreement entered into
in connection with the Transactions (other than the obligations of the
Purchaser);

            (d)   any litigation, suit, proceeding, arbitration or investigation
with respect to the affairs of any Company prior to the Closing;

            (e)   any liability of any Company resulting from repayments,
recoupments or adjustments after the Closing Date to any amounts paid or payable
to any Company for any cost report period ending on or before the Closing Date
to or from Medicare, Medicaid or any other Missouri state program with respect
to any cost adjustment, patient trust adjustment or share of cost adjustment for
any cost report, but only for that portion of the cost report period preceding
the Closing Date, if applicable;

            (f)   any liability of any Company relating to any rate adjustments,
repayments or recoupments after the Closing Date arising out of any uncured
failure by any such Company to comply with routine reporting and clinical
requirements occurring prior to the Closing Date;

            (g)   any regulatory or enforcement proceeding or action initiated
by, or on behalf of, Medicare, Medicaid or any other state program, which
relates to any alleged act or failure to act undertaken by any Company which
occurs on or before the Closing Date, regardless of when such proceeding or
action is initiated;

            (h)   amounts in respect of workers compensation for periods prior
to the Closing, including without limitation unpaid premiums for any workers
compensation policy;

            (i)   liabilities or obligations to any Affiliate of any Company
accrued prior to the Closing;

            (j)   obligations with respect to any pension, profit sharing,
retirement, employee benefit or similar plan, benefit or arrangement, including
without limitation any and all obligations of the Companies to employees in
respect of accrued paid time off, vacation or similar compensation or benefits
("Accrued PTO");

            (k)   liabilities relating to contracts other than the Assumed
Operating Contracts;

            (l)   liabilities or obligations relating to the Excluded Assets, or
not related to the Purchased Assets; or

            (m)   the aggregate amount payable by the Companies through the
Closing Date, or arising as a result of the Transactions, in respect of (i)
legal, accounting, investment banking, broker and other fees and expenses, (ii)
sales and use taxes and transfer taxes, if any, arising from the Transactions
contemplated hereby, and

                                       3



(iii) all other payments, costs and expenses incurred by the Companies in
connection with or as a result of the Transactions contemplated hereby,
including without limitation amounts required to discharge the Companies'
obligations under any Benefit Plans.

      1.5   ALLOCATION. The total amount of the Closing Purchase Price and the
Assumed Liabilities shall be allocated among the Purchased Assets and the
Companies as set forth on SCHEDULE 1.5. It is agreed by the parties that such
allocation was arrived at by arm's length negotiation and in the judgment of the
parties properly reflects the fair market value of the Purchased Assets
transferred pursuant to this Agreement. It is agreed that the allocations under
this Section 1.5 will be binding on all parties for federal, state, local and
other tax purposes in connection with the purchase and sale of the Purchased
Assets and will be consistently reflected by each party on such party's tax
returns. This SCHEDULE 1.5 shall be subject to change upon the written consent
of the parties following the appraisal to be completed by Purchaser. To the
extent that any amounts are allocated to the non-competition covenants contained
herein, such allocations shall not constitute a cap on potential liability in
the event such covenants are breached.

      1.6   TITLE EXAMINATION.

            (a)   Following execution of this Agreement, Purchaser shall obtain
and review (i) new or updated ALTA surveys of the Owned Property to be prepared
by a licensed surveyor or engineer hired by Purchaser (the "REAL ESTATE
SURVEYS"), and (ii) an ALTA "extended coverage" supplemental report or reports
for the Owned Property covered by the Real Estate Survey, provided Purchaser
satisfies any other Title Company requirements for the issuance thereof (the
"TITLE REPORT"). Purchaser shall bear the cost of the Real Estate Surveys. The
cost for the ALTA supplemental report shall be allocated among the Beneficial
Owners and the Purchaser such that the Beneficial Owners shall pay for any costs
that would have been charged for a standard title insurance policy and the
Purchaser shall pay for any expenses relating to the ALTA policy that exceeds
the cost of a standard title insurance policy.

            (b)   Purchaser shall notify Beneficial Owners in writing (the
"TITLE NOTICE") prior to the day which is five days following the receipt of
Sellers' most recent survey for each of the Acquired Facilities (hereinafter
referred to as the "TITLE INSPECTION PERIOD"), which exceptions to title
(including survey matters), if any, will not be accepted by Purchaser.
Notwithstanding anything to the contrary set forth herein, Purchaser may not
object to any issue, restriction or condition that is described in the Prior
Surveys (as defined in SCHEDULE 1.6(b)), except for the matters described on
SCHEDULE 1.6(b). If Purchaser fails to notify Beneficial Owners in writing of
any exceptions to title by the expiration of the Title Inspection Period, then
Purchaser shall be deemed to have approved the condition of title to the Owned
Property. If Purchaser notifies Beneficial Owners in writing that Purchaser
objects to any exceptions to title, then Sellers shall have five (5) days after
receipt of the Title Notice to notify Purchaser in writing (i) that Sellers will
remove such objectionable exceptions from title on or before the Closing; or
(ii) that Sellers elect not to cause such exceptions to be removed. If Sellers
fail to notify Purchaser in writing of their election within said five (5) day
period, the Seller shall be deemed to have elected not to cause such exception
to be cured. The procurement by Sellers of a commitment for the issuance of the
Title Policy (as defined in Section 1.6(e) hereof) or an endorsement thereto
satisfactory to Purchaser and insuring Purchaser against any title exception
which was disapproved pursuant to this Section 1.6(b) shall be deemed a cure by
Sellers of such disapproval. If Sellers give Purchaser notice under clause (ii)
above, then Purchaser shall have five (5) days within which to notify Seller in
writing that Purchaser will either nevertheless proceed with the purchase and
take title to the Owned Property subject to such exceptions, or that Purchaser
will terminate this Agreement. If this Agreement is terminated pursuant to the
foregoing provisions of this paragraph, then neither party shall have any
further rights or obligations hereunder (except for any indemnity obligations of
either party pursuant to the other provisions of this Agreement), the Deposit
and all interest thereon shall be returned to Purchaser and each party shall
bear its own costs incurred hereunder. If Purchaser fails to notify Seller in
writing of its election within said five (5) day period, then Purchaser shall be
deemed to have elected to proceed with the purchase and take title to the Owned
Property subject to such exceptions. Notwithstanding the foregoing, Purchaser
need not disapprove any monetary lien representing monies owed, as Seller hereby
agrees to cause all such monetary liens (other than non-delinquent ad valorem
real estate taxes and assessments) to be removed at or prior to Closing.

            (c)   PRE-CLOSING "GAP" TITLE DEFECTS. Purchaser may, at or prior to
Closing, notify Beneficial Owners in writing (the "GAP NOTICE") of any
objections to title (a) raised by the Title Company with

                                       4



respect to changes in title between the expiration of the Title Inspection
Period and the Closing and (b) title defects that are not of record and not
disclosed by the Title Company or otherwise known to Purchaser prior to the
expiration of the Title Inspection Period. Purchaser must notify Beneficial
Owners of such objection to title within five (5) days of being made aware of
the existence of such exception. If Purchaser sends a Gap Notice to Beneficial
Owners, then Purchaser and Sellers shall have the same rights and obligations
with respect to such notice as apply to a Title Notice under Section 1.6(b)
hereof.

            (d)   PERMITTED EXCEPTIONS. The Owned Property shall be conveyed
subject to the following matters, which are hereinafter referred to as the
"PERMITTED EXCEPTIONS":

                  (i)   those matters that either are not objected to in writing
      within the time periods provided in Sections 1.6(a) or 1.6(b) hereof, or
      if objected to in writing by Purchaser, are those which Sellers have
      elected not to remove or cure, or have been unable to remove or cure, and
      subject to which Purchaser has elected or is deemed to have elected to
      accept the conveyance of the Owned Property;

                  (ii)  the lien of all ad valorem real estate taxes and
      assessments not yet due and payable as of the date of Closing, subject to
      adjustment as herein provided;

                  (iii) local, state and federal laws, ordinances or
      governmental regulations, including but not limited to building and zoning
      laws, ordinances and regulations, now or hereafter in effect relating to
      the Owned Property; and

                  (iv)  items shown on the Real Estate Survey which are not
      objected to by Purchaser or are waived or deemed waived by Purchaser in
      accordance with Section 1.6(b) hereof.

            (e)   CONVEYANCE OF TITLE. At Closing Seller shall convey and
transfer to Purchaser the Owned Property, by execution and delivery of a
notarized grant deed(s) conveying the Owned Property (the "DEED"). The Title
Company shall deliver an ALTA Standard Coverage Owner's Policy(ies) of Title
Insurance (collectively, the "TITLE POLICY") covering the Owned Property,
subject only to the Permitted Exceptions and including such endorsements thereto
as Purchaser may reasonably request; provided, however, that if Purchaser has
delivered to the Title Company prior to the Closing a Survey in compliance with
all applicable ALTA requirements, then the Title Policy required hereunder shall
be an ALTA Extended Coverage Owner's Policy of Title Insurance in accordance
with the terms of this Section 1.6(e) hereof.

      1.7   RIGHT OF INSPECTION OF OWNED PROPERTY.

            (a)   INSPECTION RIGHTS. During the period beginning on the date
hereof and ending on the Closing (hereinafter referred to as the "INSPECTION
PERIOD"), Purchaser shall have the right to:

                  (i)   Perform, or hire consultants to perform a physical
      inspection and an appraisal of the Owned Property.

                  (ii)  Inspect, or hire consultants to inspect, the
      environmental condition of the Owned Property pursuant to the terms and
      conditions of this Agreement, and to obtain and review, at Purchaser's
      sole election and cost, soils, geology, structural and environmental and
      any other engineering reports.

                  (iii) To obtain and examine a search report showing liens
      against the personal property which have been perfected by filings under
      the Uniform Commercial Code.

                  (iv)  To examine at the Owned Properties, the applicable
      Company's office, physical delivery to the Purchaser and/or the property
      manager's office, as the case may be, all books, records, reports, and
      files related to the ownership, leasing, maintenance and operation of the
      Owned Property, which are to be provided by Sellers to the extent
      available and permitted by law. Such documents include, without
      limitation, (i) Sellers' current files for the Owned Properties, including
      copies of all existing Assumed Operating Contracts, (ii) as-built plans
      and specifications for the Improvements, (iii) prior soils,

                                       5



      geology, structural and engineering reports, (iv) recorded and unrecorded
      parking agreements, (v) common area maintenance agreements or other
      agreements affecting the Owned Property, (vi) certificates of occupancy
      pertaining to the Improvements, (vii) pertinent correspondence with
      governmental agencies and current tenants concerning the Owned Property,
      and (viii) evidence that the Owned Property is zoned for the purpose to
      which Purchaser intends to use it.

                  (v)   To have access to employees, advisors, consultants,
      other personnel, customers or suppliers of, third party payors, health
      department and other agency officials, or others having material business
      relations with, the Companies.

            (b)   CONDITIONS TO ON-SITE INSPECTIONS. Any on-site inspections of
the Owned Property: (i) shall be conducted so as not to interfere unreasonably
with the use of the Owned Property by Seller or its tenants, and (iii) shall be
subject to the consent of the Seller with respect to the date, time and manner
of the inspection, which consent shall not be unreasonably withheld or
unreasonably restrictive. Sellers may have a representative present during any
such inspections. If Purchaser desires to do any invasive testing at the Owned
Property, Purchaser shall do so only after notifying the Beneficial Owners and
obtaining the applicable Seller's prior written consent thereto, which consent
shall not be unreasonably withheld or delayed. Purchaser agrees to protect,
indemnify, defend and hold the applicable Seller harmless from and against any
claim for liabilities, losses, costs, expenses (including reasonable attorneys'
fees), damages or injuries arising out of or resulting from the inspection of
the Owned Property by Purchaser or its agents or consultants, and such
obligation to indemnify and hold harmless such Seller shall survive the Closing
or any termination of this Agreement, provided, however, that the foregoing
indemnity shall not extend to any losses, costs or expenses resulting from the
negligence or willful misconduct of Seller. Notwithstanding anything to the
contrary contained in this Agreement, Seller acknowledges and agrees that
Purchaser shall not have any liability pursuant to the terms of this Agreement
for any discovery by Purchaser of an adverse environmental or other condition
during the course of its tests, studies, inspections or examinations of the
Owned Property, unless such conditions are caused by Purchaser. Purchaser shall
keep the Owned Property free and clear of any mechanic's liens or materialmen's
liens arising out of Purchaser's entry onto the Owned Property.

            (c)   RIGHT OF TERMINATION. If Purchaser reasonably determines that
any aspect of the environmental condition inspections contemplated by Section
1.7 hereof makes the Owned Property unsuitable for Purchaser's acquisition,
Purchaser shall have the right, prior to the expiration of the Inspection
Period, to give written notice of termination specifying the nature of the
environmental condition deficiency to Beneficial Owners. Sellers may elect to
cure any environmental deficiency within thirty (30) days after receipt of such
written notice. If Sellers elect not to cure such deficiency or such cure is
inadequate, as determined in Purchaser's reasonable discretion, this Agreement
shall terminate and neither party shall have any further obligations hereunder
(except for any indemnity obligations of either party pursuant to the other
provisions of this Agreement), the Deposit and all interest thereon shall be
returned to Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser fails to give Beneficial Owners a notice of termination
prior to the expiration of the Inspection Period, then Purchaser shall be deemed
to have approved all aspects of the Owned Property (except for title and survey,
which shall be governed by Section 1.6 hereof) and to have elected to proceed
with the purchase of the Owned Property pursuant to the terms hereof.
Notwithstanding anything to the contrary set forth herein, Purchaser may not
object to any environmental issue, restriction or condition set forth in the
Phase I Environmental Reports (as defined in Schedule 1.7(c)), except for those
matters described on SCHEDULE 1.7(c).

      1.8   CLOSING. The purchase and sale of the Purchased Assets hereunder
shall take place at a closing (the "CLOSING") to be held on March 1, 2006, or as
soon as reasonably practicable thereafter following the satisfaction or waiver
of the conditions set forth in ARTICLE 6, or on such other date as agreed to in
writing by the Sellers and the Purchaser (the "CLOSING DATE").

      1.9   DELIVERIES BY THE COMPANY AND THE BENEFICIAL OWNERS. At the Closing,
and upon satisfaction or waiver of the conditions set forth in ARTICLE 6 herein,
the Sellers will deliver or cause to be delivered to the Purchaser the
instruments, consents, opinions, certificates and other documents required of
them by ARTICLE 6.

      1.10  DELIVERIES BY THE PURCHASER. At the Closing, and upon satisfaction
or waiver of the conditions set forth in ARTICLE 6 herein, the Purchaser will
deliver or cause to be delivered to the Sellers the instruments, opinions,
certificates and other documents required of it by ARTICLE 6.

                                       6



                                   ARTICLE 2.
                        REPRESENTATIONS AND WARRANTIES OF
                                   THE SELLERS

      The Sellers hereby represent and warrant to the Purchaser that each of the
statements contained in this ARTICLE 2 is true and correct and will be true and
correct as of the Closing Date. For purposes of this Agreement, the word
"Knowledge" with respect to the Sellers or "TO THE KNOWLEDGE OF SELLERS" or
words of similar import means the knowledge after due inquiry of M. Terence
Reardon, M. Sue Reardon, Edward J. Reardon and any of the other officers,
managers, or administrators of the Sellers; provided, however, Sellers are
entitled to update the disclosure schedules with the knowledge of any officer,
manager or administrator of the Sellers through February 6, 2006 with respect to
any representation or warranty in this ARTICLE 2 qualified by Knowledge.

      2.1   ORGANIZATION, POWER AND STANDING. Each of the Companies is a limited
liability company or corporation duly formed, validly existing and in good
standing under the laws of the state or jurisdiction in which it is organized,
as set forth on SCHEDULE 2.1. Each of the Companies has all requisite power and
authority to own, lease and operate its properties and to carry on the Business.
As used herein, "BUSINESS" means leasing and operating nursing homes and
residential care facilities (collectively, the "ACQUIRED FACILITIES"), and
providing management, staffing, recruitment and therapy (including physical,
occupational and speech) contracting services to long term care facilities as
such activities are currently conducted by the Companies. All of the assets,
properties and rights owned, leased or licensed by Sellers necessary to conduct
the Business are located in Missouri.

      2.2   SUBSIDIARIES. Except as set forth on SCHEDULE 2.2, no Company
directly or indirectly owns or has the right to acquire any equity interest in
any other corporation, partnership, limited liability company, joint venture, or
other business organization.

      2.3   VALIDITY AND ENFORCEABILITY. The execution, delivery and performance
of each of the agreements, documents and instruments contemplated hereby to
which any Company is a party, has been duly authorized by such Company. Each
such agreement, document and instrument shall when executed be the valid and
binding obligations of such Company and of each Seller, enforceable in
accordance with its terms.

      2.4   FINANCIAL STATEMENTS. Sellers have previously provided to Purchaser
(a) income statements for each of the Companies for the years ended December 31,
2003 and 2004 during which each such Company owned or operated an Acquired
Facility, (b) income statements for each of the Companies for each of the months
in 2005 ending on or before November 30, 2005, and (c) balance sheets for each
of the Companies as of November 30, 2005. As used herein, November 30, 2005 is
referred to as the "BALANCE SHEET DATE", and each balance sheet as of any such
date attached as SCHEDULE 2.4 is referred to as the "BALANCE SHEET". Such
financial statements and the notes thereto, if any, are unaudited, but are
complete and accurate in all material respects and fairly present the financial
condition of the Companies at the respective dates thereof and the results of
their operations for the periods then ended, and were prepared in accordance
with the books and records of the Companies in conformity with generally
accepted accounting principles, consistently applied during the periods covered
thereby (except for the absence of footnotes in the case of the unaudited
financial statements).

      2.5   MATERIAL ADVERSE CHANGES. Since January 1, 2005, other than as set
forth on SCHEDULE 2.5, each Company has operated only in the usual and ordinary
course, and there has been no (a) acquisition or disposition of assets or
securities, or commitment therefor by any Company, except for the acquisition or
disposition of assets in the ordinary course of business, (b) liens, security
interests, restrictions, or encumbrances placed upon any of the assets of any
Company, except in the ordinary course of business, or (c) increase in the
compensation or commission rates payable by any Company to any officer,
director, employee, consultant or sales agent, except in accordance with past
practice, or (d) event or condition relating specifically to the Companies
(rather than to general economic conditions or generally to the industries in
which they operate) which has had or, together with any other events or
conditions, could reasonably be expected to have a material adverse effect on
the Business or the affairs, assets, condition (financial or otherwise) or
prospects of any Company.

      2.6   MATERIAL CONTRACTS. SCHEDULE 2.6 sets forth a complete and accurate
list, in each case whether written or unwritten, of all of the following
(including all amendments or modifications thereof):

                                       7



            (a)   agreements, contracts or other arrangements with respect to
which any one or more of the Companies has any liability or obligation involving
more than $10,000 contingent or otherwise, or which may extend for a term of
more than one year after the Closing;

            (b)   licenses, leases, contracts, agreements and other arrangements
with respect to any material property (including medical equipment, but
excluding other than real property) of any Company, including without
limitation, all licenses or agreements relating to Intellectual Property, and
sales and supply contracts;

            (c)   agreements, contracts or arrangements of any Company with
officers, directors, managers, members or Affiliates of any Company or any of
their respective relatives or Affiliates (as used herein, "AFFILIATE" has the
meaning ascribed to it in Rule 405 promulgated under the Securities Act of 1933,
as amended (the "SECURITIES Act"));

            (d)   material agreements or arrangements with physicians, physical
therapists, occupational therapists, nutritionists and other individual and
institutional health care providers, third party payors and other health care
facilities, including without limitation nursing homes, visiting nurse
associations, home health agencies, durable medical equipment suppliers,
pharmacies, hospitals, hospices, retirement homes and life care communities;

            (e)   employment, collective bargaining, severance, consulting
(except for consulting agreements covered in Section 2.6(d) above), deferred
compensation, benefit and similar plans, agreements, arrangements or contracts
involving any Company;

            (f)   utility, trust and other bonds (the "BONDS") and deposits,
excluding patient accounts and deposits to be transferred in accordance with the
Operations Transfer Agreement (the "COMPANY DEPOSITS"), maintained or required
to be maintained by any Company and guarantees thereof by any Beneficial Owner;
and

            (g)   other material agreements, contracts, instruments,
commitments, plans or arrangements of any Company.

      All the foregoing (whether written or unwritten) are referred to as
"MATERIAL CONTRACTS". Sellers have furnished to the Purchaser true, correct and
complete copies of all Material Contracts (or written descriptions thereof, in
the case of oral contracts). Each Material Contract (or description) sets forth
the entire agreement and understanding between a Company and the other parties
thereto. Each Assumed Operating Contract is valid, binding and in full force and
effect, and there is no event or condition which has occurred or exists, which
constitutes or which, with or without notice, the happening of any event and/or
the passage of time, could constitute a default or breach under any such Assumed
Operating Contract by any Company or, any other party thereto, or could cause
the acceleration of any obligation of any party thereto or give rise to any
right of termination or cancellation thereof.

      2.7   REAL PROPERTY.

            (a)   SCHEDULE 2.7(a) sets forth each interest in real property
(including all land, buildings, easements and other real property rights) owned
by any Company or the owner of the real property referred to in SCHEDULE 2.7(a)
(the "OWNED PROPERTY"). The respective owner of the Owned Property has, or will
have on the Closing Date, good and clear record and marketable (and insurable,
at ordinary premium rates) title to the Owned Property, free and clear of all
deeds and indentures of trust, mortgages, liens, restrictions, options, leases
and encumbrances of any kind, except Permitted Exceptions or as specified on
SCHEDULE 2.7(a) and enjoys peaceful and quiet possession of the Owned Property.
There are no material taxes, levies, fees or similar costs or charges which must
be paid with respect to existing water or sewer hook-ups or other similar
services relating to the Owned Property. All utility systems serving the Owned
Property are installed, subject to valid and existing easements, if applicable,
and are reasonably adequate for the Business.

            (b)   The Owned Property constitutes all the real property (or
interest in real property) necessary for, or currently used in, the conduct of
the Business. There are no interests in real property leased by any Seller in
connection with the Business or by any Company.

                                       8



            (c)   There is no pending or, to the Knowledge of the Sellers any
threatened condemnation, eminent domain or similar proceeding with respect to
any Owned Property.

            (d)   Each Owned Property is in compliance in all material respects
with all building, zoning, subdivision, health, safety and other applicable
federal, state and local laws and regulations. For purposes of the foregoing
sentence, compliance with zoning laws and regulations means compliance with such
laws and regulations as currently in effect and without taking into account any
portion thereof that may permit non-conforming uses. The Owned Property is
legally subdivided and consists of separate tax lots so that each is assessed
separate and apart from any other real property. None of the buildings, plant or
structures included in the Owned Property is in need of material maintenance or
repairs, except for ordinary and routine maintenance and repairs that are not
material.

            (e)   Sellers hold all consents, permits, licenses, approvals and
authorizations from governmental authorities or other third parties which are
necessary to permit Seller to convey the Owned Property in accordance with the
provisions of this Agreement and the use of the Owned Property for its current
use and the current conduct of the Business by the Sellers, all of which are in
full force and effect and the Owned Property is in compliance with all
applicable zoning ordinances and the Permitted Exceptions .

      2.8   DELIVERY OF TITLE DOCUMENTS. Sellers have delivered to Purchaser (a)
copies of the most recent property tax bills for the Owned Property; and (b) a
copy of Sellers' most recent title insurance policy and/or survey for the Owned
Property.

      2.9   PERSONAL PROPERTY. Each Company has good title to or a valid
leasehold or license interest in each item of personal property included in the
Purchased Assets, free and clear of any security interests, liens, restrictions
and encumbrances of every kind, nature and description, except such liens and
encumbrances as will be released at Closing. All material assets of each Company
are in good operating condition and repair, normal wear and tear excepted. The
Purchased Assets and properties of each Company include all assets currently
used in the conduct of the Business.

      2.10  INTELLECTUAL PROPERTY.

            (a)   As used herein "INTELLECTUAL PROPERTY" means all (i) patents,
patent applications, patent disclosures and inventions, (ii) trademarks, service
marks, trade dress, trade names, logos and corporate names (in each case,
whether registered or unregistered) and registrations and applications for
registration thereof together, to the extent applicable, with all of the
goodwill associated therewith, (iii) copyrights (registered or unregistered) and
registrations and applications for registration thereof, (iv) computer software,
data, data bases and documentation thereof, (v) trade secrets and other
confidential information (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), (vi) World
Wide Web addresses and domain name registrations and (vii) works of authorship
including, without limitation, computer programs, source code and executable
code, whether embodied in software, firmware or otherwise, documentation,
designs, files, records, data and mask works and any rights in semiconductor
masks, layouts, architectures or topography. As used herein "COMPANY
INTELLECTUAL PROPERTY" means Intellectual Property owned or used by any Company,
but excluding the MDI billing and accounting software package and other
intellectual property listed on Schedule 1.2 (Excluded Assets).

            (b)   SCHEDULE 2.10(b) hereto contains (1) a complete and accurate
list of all Company Intellectual Property included in clauses (i) - (iii) and
(vi) of the definition of Intellectual Property, and (2) a complete and accurate
list of all licenses and other rights granted by any Company to any natural
person, corporation, limited liability company, partnership, trust or other
entity (each a "PERSON") with respect to any Company Intellectual Property and
all licenses and other rights granted by any Person to any Company with respect
to any Company Intellectual Property (excluding "off-the-shelf" programs or
products or other "shrink wrap" software licensed in the ordinary course of
business) identifying the subject Company Intellectual Property and describing
the material terms of such licenses or other rights. Except as set forth on
SCHEDULE 2.10(B), there is no threatened or reasonably foreseeable loss or
expiration of any Company Intellectual Property.

                                       9



            (c)   Each Company owns or possesses sufficient legal rights to all
Intellectual Property necessary for or used in the Business and to the Knowledge
of Sellers, without any infringement of the rights of others.

            (d)   The Companies have taken all steps that are reasonably
required to protect their rights in, and the confidentiality of, the Company
Intellectual Property belonging to any Company or provided by any other Person
to any Company.

      2.11  INVENTORIES. The inventory of each Company is and as of the Closing
will be fit and sufficient for the purposes for which it was provided or
obtained and will be normal and reasonable in kind and amount in light of the
normal needs of the Business.

      2.12  RESIDENTS AND SUPPLIERS. SCHEDULE 2.12 sets forth the average daily
census for each Acquired Facility, in each case for 2004 and for each of the
months in 2005 ending prior to the execution of this Agreement. SCHEDULE 2.12
hereto also sets forth a list of (a) each hospital, health maintenance
organization, physician or physician group that (i) accounted for more than 5%
of the patient referrals to any Company during 2004, (ii) accounted for more
than 5% of the aggregate patient referrals to the Companies during 2004, (iii)
is expected by the Sellers to account for more than 5% of the patient referrals
to any Company during 2005, or (iv) is expected by Sellers to account for more
than 5% of the aggregate patient referrals to the Companies during 2005, and (b)
each customer that (i) purchased more than 5% of the services of any Company
during 2004, (ii) purchased more than 5% of the aggregate services of the
Companies during 2004, (iii) is expected by the Sellers to purchase more than 5%
of the services provided by any Company during 2005, or (iv) is expected by the
Sellers to purchase more than 5% of the aggregate services provided by the
Companies during 2005 (such referral sources and customers are referred to
collectively as the "MATERIAL CUSTOMERS"). To the Knowledge of the Sellers, no
Material Customer plans to discontinue or materially reduce resident referrals
to or the services purchased from any Company. Except as set forth on SCHEDULE
2.12, during the previous 18 months no Material Customer has terminated, or to
the Knowledge of the Sellers, threatened to terminate, its relationship with any
Company, or has decreased materially or, to the Knowledge of the Sellers,
threatened to decrease or limit materially the residents referred to or the
service purchased from any Company, and, to the Knowledge of the Sellers, no
Company will lose or suffer material diminution in its relationship with any
Material Customer as a result of the Transactions. To the Knowledge of the
Sellers, all suppliers material to any Company will continue to sell to such
Company the products and services currently sold by each of them. The Sellers
and the Companies do not know or have no reason to know that any Company's
relationship with its residents, Material Customers, referral sources and
suppliers are other than good commercial working relationships.

      2.13  THIRD-PARTY PAYORS. Except as set forth on SCHEDULE 2.13 hereto,
during the previous 18 months no Company has lost any third-party payor contract
or the right to participate in any governmentally-sponsored health insurance
program or suffered any material diminution in its relationship with any
third-party payor since such date, to the Knowledge of the Sellers, no such
action is threatened against any Company, and, to the Knowledge of the Sellers,
no Company may reasonably be expected to lose or suffer a material diminution in
its relationship with any material third party payor as a result of the
Transactions.

      2.14  CERTAIN FINANCIAL RELATIONSHIPS. All financial relationships
(whether or not memorialized in a writing) that any Company has or had with a
physician or an immediate family member of a physician since January 1, 1998
either (1) satisfy the requirements of an exception to 42 U.S.C. Section 1395nn,
42 U.S.C. Section 1320a-7, 42 U.S.C. Section 1320a-7(a) or 42 U.S.C. Section
1320a-7(b) (including, without limitation, the exception for medical directors),
or (2) do not involve the referral of residents to any Company by a physician
with whom any Company has a "financial relationship" within the meaning set
forth in 42 U.S.C. Section 1395nn.

      2.15  SELLERS' REQUIRED CONSENTS. Except as specified on SCHEDULE 2.15, no
consent, order, authorization, approval, declaration or filing, including,
without limitation, any consent, approval or authorization of or declaration or
filing with any governmental or non-governmental authority or any party to a
Material Contract is required on the part of any of the Sellers for or in
connection with the execution, delivery or performance of this Agreement and the
agreements, documents and instruments contemplated hereby (the "SELLERS'
REQUIRED CONSENTS"). The Sellers have no reason to believe that all of the
Sellers' Required Consents will not be obtained. Subject to obtaining the
Sellers' Required Consents specified on SCHEDULE 2.15, the execution, delivery
and

                                       10



performance of this Agreement and the other instruments, documents and
agreements contemplated hereby by the Sellers will not result in any violation
of, be in conflict with or constitute a default under, any law, statute,
regulation, ordinance, agreement, contract, instrument, license, permit,
authorization, judgment, decree or order to which any Company is a party or by
which any Company is bound.

      2.16  REGULATORY AND LEGAL COMPLIANCE.

            (a)   Each Company is in compliance in all material respects with
all federal, state and local statutes, laws, ordinances, judgments, decrees,
orders or governmental rules, regulations, policies and guidelines applicable to
it. Except as set forth on SCHEDULE 2.16(a), to Sellers' Knowledge no Company
has received any notice from any governmental or regulatory authority or
otherwise of any alleged violation or noncompliance that has not been cured or
addressed by a plan of corrective action.

            (b)   No Company has received written notice that any action has
been taken or recommended by any governmental or regulatory official, body or
authority, either to revoke, withdraw or suspend any license to operate any
Company or to terminate or decertify any participation of any Company in the
Medicare or Medicaid programs, nor to the Knowledge of the Sellers, is there any
decision not to renew any Medicare of Medicaid provider or supplier agreement
related to any Company.

            (c)   To the Knowledge of Sellers, the operations of each Company
are in compliance with and do not otherwise violate the federal Medicare and
Medicaid statutes regarding health professional self-referrals, 42 U.S.C.
Section 1395nn and 42 U.S.C. Section 1396b, or the regulations promulgated
pursuant to such statute, or similar state or local statutes or regulations.

            (d)   No Company nor its respective, partners, officers, members,
managers and directors, nor to the Knowledge of the Sellers, any persons who
provide professional services under agreements with such Company have, in
connection with their activities directly or indirectly related to such Company,
engaged in any activities which are prohibited under federal Medicare and
Medicaid statutes, 42 U.S.C. Sections 1320a-7, 1320a-7(a) and 1320a-7b, or the
regulations promulgated pursuant to such statutes or related state or local
statutes or regulations or which are prohibited by rules of professional
conduct, including but not limited to the following:

                  (i) making or causing to be made a false statement or
      representation of a material fact in any application for any benefit or
      payment

                  (ii)  making or causing to be made any false statement or
      representation of a material fact for use in determining rights to any
      benefit or payment

                  (iii) presenting or causing to be presented a claim for
      reimbursement for services under any Federal health care program,
      including but not limited to Medicare, Medicaid or any state health care
      program that is for an item or service that is known or should be known to
      be (A) not provided as claimed, or (B) false or fraudulent

                  (iv)  failing to disclose knowledge by a claimant of the
      occurrence of any event affecting the initial or continued right to any
      benefit or payment on its own behalf or on behalf of another, with intent
      to fraudulently secure such benefit or payment

                  (v)   offering, paying, soliciting or receiving any
      remuneration (including any kickback, bribe, or rebate), directly or
      indirectly, overtly or covertly, in cash or in kind (A) in return for
      referring an individual to a person for the furnishing or arranging for
      the furnishing of any item or service for which payment may be made in
      whole or in part by any Federal health care program, including but not
      limited to Medicare, Medicaid, or any state health care program, or (B) in
      return for purchasing, leasing, or ordering any good, facility, service,
      or item for which payment may be made in whole or in part by Medicare or
      Medicaid or other state health care program; or

                                       11



                  (vi)  making or causing to be made or inducing or seeking to
      induce the making of any false statement or representation (or omitting to
      state a fact required to be stated therein or necessary to make the
      statements contained therein not misleading) of a material fact with
      respect to (A) the conditions or operations of a facility in order that
      the facility may qualify for any Federal health care program, including
      but not limited to Medicare, Medicaid, or any state health care program
      certification, or (B) information required to be provided under Section
      1124Aof the Social Security Act (42 U.S.C. Section 1320a-3).

            (e)   To the Knowledge of Sellers, the operations of each Company
are in compliance with and do not violate any federal, state or other statutes
or regulations governing the lawfulness and fairness of its business practices
or its responsibilities to uphold and protect the rights of residents.

            (f)   Each Company, or portion thereof, or Company group health plan
which has been determined to be a Covered Entity pursuant to the Health
Insurance Portability and Accountability Act of 1996 and any regulations
promulgated thereunder ("HIPAA"), and each small health plan operated by any
Company and not required to comply with HIPAA prior to April 14, 2004, (i) is
executing transactions in compliance with, or capable of submitting transactions
in compliance with (in the event that insurers or payers are not yet accepting
standard transactions), the standard transaction requirements established by
HIPAA for Covered Entities, (ii) is operating in compliance in all material
respects with the HIPAA privacy regulations for Covered Entities, including
without limitation executing all necessary business associates agreements as
required by HIPAA, and (iii) has developed and implemented appropriate
safeguards to comply with the final HIPAA security regulations.

            (g)   None of the Companies have provider contracts with TRICARE or
the Department of Veterans Affairs.

            (h)   Each Company maintains in one or more separate trust accounts
all Company Deposits required by applicable law to be held for the benefit of
residents. The Companies are in compliance with applicable law with respect to
all such Company Deposits.

            (i)   The Sellers have furnished Purchaser with true, accurate and
complete copies of all surveys, inspection reports and similar examination
reports relating to any inspections or examinations by any federal, state or
local regulatory agency or administration having jurisdiction over the Companies
during the year ended December 31, 2004 and during 2005 (collectively, the
"Surveys"). Except as set forth on SCHEDULE 2.16(i), such Surveys do not contain
any material violations of federal, state and local statutes, laws, ordinances,
judgments, decrees, orders or governmental rules, regulations, policies and
guidelines applicable to it except as have been cured or addressed by a plan of
corrective action.

      2.17  COST REPORTS. The Sellers have furnished Purchaser with copies of
all cost reports filed by the Companies with the appropriate Missouri state
agency, the appropriate Medicare and Medicaid agencies and/or fiscal
intermediaries in respect of the operation of the Acquired Facilities for the
years ended December 31, 2002, 2003 and 2004, if applicable, and any interim
periods during the years then ended and during 2005. Such cost reports did not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading. Such
cost reports were filed no later than the date on which such final cost reports
were required to be filed by law under the terms of the Missouri state agency,
Medicare and Medicaid programs, and the Companies have provided the appropriate
agencies and/or fiscal intermediaries with any information needed to support
claims for reimbursement made by the Companies either in said final cost reports
or in any cost reports filed for prior cost reporting periods.

      2.18  [INTENTIONALLY OMITTED]

      2.19  LICENSES AND PERMITS. SCHEDULE 2.19 sets forth all material
licenses, permits, authorizations and certifications of governmental authorities
and third parties held by any Company, including without limitation all
licenses, franchises, permits, accreditations and provider or supplier
agreements as may be required under Title XVIII and XIX of the Social Security
Act and other applicable laws for reimbursement of services rendered or goods
sold, necessary or advisable under applicable law for the conduct of its
Business (collectively, the "AUTHORIZATIONS"). Each Company is in material
compliance with all such Authorizations, all of which are and will be in full
force and effect up to the Closing. There are no other such licenses, permits,
authorizations or

                                       12



certifications required for the operation of the Business which such Company has
not obtained or which, in good industry practice, such Company should hold for
the conduct of the Business. To the Knowledge of the Sellers, there has been no
threatened suspension, revocation or invalidation of any Authorization, nor is
there any basis therefor.

      2.20  LITIGATION. Except as set forth on SCHEDULE 2.20 there is no action,
suit, proceeding or investigation before any court, arbitrator or governmental
authority, pending or, to the Knowledge of the Sellers, threatened against any
Company or, to the Knowledge of the Sellers, against any member, officer,
director or employee of any Company in relation to the affairs of any Company.
No Company is currently planning to initiate any action, suit, or proceeding
relating to the Purchased Assets or the Business before any court, arbitrator or
governmental authority.

      2.21  EMPLOYEES AND COMPENSATION.

            (a)   Each Company is in compliance in all material respects with
the Age Discrimination in Employment Act of 1967, as amended, the Americans with
Disabilities Act of 1990, as amended, ERISA, and state fair employment
practices, laws and regulations and other laws prohibiting employment
discrimination.

            (b)   Each Company is in compliance in all material respects with
all applicable federal, state and local laws and regulations respecting
employment and employment practices in the jurisdictions within which they
operate. Each Company is in compliance with all applicable laws and regulations
governing minimum wage, including without limitation any other laws (such as
Medicaid) that impose or establish wage requirements based upon minimum wage
laws.

            (c)   Except as set forth on SCHEDULE 2.21(c), no employees of any
Company are represented by a union, and there is no labor strike, dispute,
arbitration, grievance, slowdown, stoppage, organizational effort, dispute or
proceeding by or with any employee or former employee of any Company or any
labor union pending or threatened against any Company.

            (d)   SCHEDULE 2.2 1(d) sets forth a complete list of all employees
of and consultants to any Company, with annual compensation in excess of
$50,000, showing date of hire, hourly rate or salary or other basis of
compensation, other benefits accrued as of a recent date and job function. No
employee listed on SCHEDULE 2.2 1(d) has been convicted of or pleaded guilty or
nolo contendre to (i) any felony or (ii) any other criminal violation applicable
to the Business or any similar business.

            (e)   There are no Company employees or to the Knowledge of the
Sellers, no Company has entered into consulting contracts or arrangements with
individuals or entities that have been excluded or debarred from participation
in Federal health care programs including, but not limited to Medicare or
Medicaid. No Company has identified, reassigned or terminated within the past
two years, any officer, director, employee, consultant, independent contractor
or vendor/supplier who has been the subject of an exclusion or debarment action.

      2.22  ERISA; COMPENSATION AND BENEFIT PLANS.

            (a)   SCHEDULE 2.22(a) sets forth all employee compensation and
benefit plans, agreements, commitments, practices or arrangements of any type
(including, but not limited to, plans described in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) offered,
maintained or contributed to by any Company for the benefit of current or former
employees or directors of any Company, or with respect to which any Company has
or may have any liability, whether direct or indirect, actual or contingent
(including, but not limited to, liabilities arising from affiliation under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended
(together with applicable regulations, the "Code") or Section 4001 of ERISA)
(collectively, the "BENEFIT PLANS"), and includes a written description of all
oral Benefit Plans. There are no material compensation or benefit plans,
agreements, commitments, practices or arrangements of any type providing
benefits to employees or directors of any Company, or with respect to which any
Company may have any liability, other than the Benefit Plans.

                                       13



            (b)   With respect to each Benefit Plan, each Company has delivered
to the Purchaser true and complete copies of: (i) any and all plan texts and
agreements (including, but not limited to, trust agreements and insurance
contracts); (ii) any and all material employee communications (including all
summary plan descriptions); (iii) the most recent annual report (Form 5500), if
applicable; and (iv) the most recent annual and periodic accounting of plan
assets, if applicable.

            (c)   With respect to each Benefit Plan: (i) such plan has been
administered and enforced in accordance with its terms and all applicable laws,
regulations and rulings in all material respects; (ii) no material disputes nor
any audits or investigations by any governmental authority are pending or, to
the knowledge of the Sellers, threatened; (iii) all contributions, premiums, and
other payment obligations have been accrued on the Balance Sheet in accordance
with generally accepted accounting principles, and, to the extent due, have been
made on a timely basis, in all material respects; (iv) each Company has
expressly reserved in itself the right to amend, modify or terminate such plan,
or any portion of it, at any time without liability to itself; (v) no such plan
requires any Company to continue to employ any employee or director; (vi) no
such plan is, or has ever been, subject to Title IV of ERISA; (vii) no such plan
provides medical or death benefits with respect to current or former employees
or directors of any Company beyond their termination of employment, other than
coverage mandated by Sections 601- 608 of ERISA and 4980B(f) of the Code.

            (d)   Except as set forth on SCHEDULE 2.22(d), the consummation of
the Transactions contemplated by this Agreement will not (i) entitle any Person
to severance pay, (ii) accelerate the time of payment or vesting under any
Benefit Plan, or (iii) increase the amount of compensation or benefits due to
any Person. SCHEDULE 2.22(d) lists all estimated Accrued PTO obligations to
current employees, including Accrued PTO obligations that will be owed to
current employees as a result of the consummation of the Transactions.

      2.23  ENVIRONMENTAL MATTERS.

            (a)   The ownership or use of each Company's premises and assets,
the occupancy and operation thereof, and the conduct of each Company's
operations and business, are in compliance in all material respects with all
applicable federal, state and local laws, ordinances, regulations, standards and
requirements relating to pollution, environmental protection, hazardous
substances and related matters. Except as noted on Schedule 1.7(c), there is no
liability attaching to any Company or such premises or assets or the ownership
or operation thereof as a result of (a) to the Knowledge of Sellers, with
respect to actions by Persons other than the Sellers, and (b) the actions of
Sellers, for any hazardous substance that may have been discharged on or
released from such premises, or disposed of on-site or off-site, or any other
circumstance occurring prior to the Closing or existing as of the Closing. For
purposes of this Section, "hazardous substance" shall mean oil, mold or any
other substance which is included within the definition of a "hazardous
substance", "pollutant", "toxic substance", "toxic waste", "hazardous waste",
"contaminant" or other words of similar import in any federal, state or local
environmental law, ordinance or regulation.

            (b)   No Company is in violation of, or to the Knowledge of Sellers,
is the subject of any investigation, inquiry or enforcement action by any
governmental authority under the Medical Waste Tracking Act, 42 U.S.C. Section
6992 et seq., or any applicable state or local governmental statute, ordinance
or regulation dealing with the disposal of medical wastes ("MEDICAL WASTE
LAWS"). Each Company has obtained and is in compliance in all material respects
with any permits related to medical waste disposal required by the Medical Waste
Laws, and has taken reasonable steps to determine, and has determined, that all
disposal of medical waste by it has been in compliance with the Medical Waste
Laws.

      2.24  INSURANCE. SCHEDULE 2.24 sets forth all insurance policies under
which any Company is insured, the name of the insurer of each policy, the type
of policy provided by such insurer, the amount, scope and period covered thereby
and a description of any material claims made thereunder (collectively, the
"INSURANCE POLICIES"). Such Insurance Policies are valid and in full force and
effect and in the good faith estimate of Sellers, are adequate to insure against
all liabilities, claims and risks against which it is customary for companies
similarly situated as the Companies to insure. All premiums due to date under
such Insurance Policies have been paid, no default exists thereunder and, with
respect to any material claims made under such policies, no insurer has made any
"reservation of rights" or refused to cover all or any portion of such claims.
No Company has received any notice of any proposed material increase in the
premiums payable for coverage, or proposed reduction in the scope (or

                                       14




discontinuation) of coverage, under any of such Insurance Policies. All
liabilities and expenses relating to the Insurance Policies have been properly
accrued on the Balance Sheet.

      2.25  DEBT. Other than the Excluded Liabilities, at the Closing Sellers
will not have any principal, interest or expenses in respect of borrowed money,
capital leases, letters of credit and installment purchases incurred by the
Companies prior to the Closing that creates a lien or encumbrance on any
Purchased Asset.

      2.26  DISCLOSURE. The representations, warranties and other statements of
the Sellers contained in this Agreement and the other documents, certificates
and written statements furnished to the Purchaser by or on behalf of the Sellers
pursuant thereto, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein and therein not misleading.

      2.27  SEVERAL REPRESENTATIONS OF THE BENEFICIAL OWNERS. Each Beneficial
Owner severally represents to the Purchaser solely with respect to such
Beneficial Owner as follows:

            (a)   AUTHORITY. Such Beneficial Owner has all requisite power and
authority to enter into this Agreement and perform such Beneficial Owner's
obligations hereunder, and this Agreement has been duly authorized by such
Beneficial Owner and constitutes a valid and binding obligation of such
Beneficial Owner enforceable against such Beneficial Owner in accordance with
its terms.

            (b)   NO CONFLICT. The execution, delivery and performance of this
Agreement and the other instruments and agreements contemplated hereby by such
Beneficial Owner will not result in any violation of, be in conflict with or
constitute a default under, any law, statute, regulation ordinance, material
contract or agreement, instrument, judgment, decree or order to which such
Beneficial Owner is a party or by which such Beneficial Owner is bound.

            (c)   BROKERS. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of any Beneficial Owner in connection with this
Agreement or any of the Transactions, and no such Person is entitled to any fee,
payment, commission or other consideration in connection therewith as a result
of any arrangement made by such Beneficial Owner, except for Senior Living
Investment Brokerage, Inc., whose fees and expenses will be paid by such
Beneficial Owner.

                                   ARTICLE 3.
                        REPRESENTATIONS AND WARRANTIES OF
                                  THE PURCHASER

      The Purchaser represents and warrants to the Sellers that each of the
statements contained in this ARTICLE 3 is true and correct and will be true and
correct as of the Closing Date:

      3.1   ORGANIZATION. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware.

      3.2   AUTHORITY. The Purchaser has all requisite corporate power and
authority to enter into this Agreement and perform such Purchaser's obligations
hereunder, and this Agreement has been duly authorized by Purchaser and
constitutes a valid and binding obligation of the Purchaser enforceable against
the Purchaser in accordance with its terms.

      3.3 PURCHASER REQUIRED CONSENTS. Except as specified on SCHEDULE 3.3, no
consent, order, authorization, approval, declaration or filing is required on
the part of the Purchaser for or in connection with the execution, delivery or
performance of this Agreement and the agreements, documents and instruments
contemplated hereby, or the conduct of the Business by the Purchaser after the
Closing (the "PURCHASER REQUIRED CONSENTS"). Without limiting the generality of
the foregoing, the Purchaser Required Consents shall include (a) any and all
local, state and federal licenses necessary to enable the Purchaser to operate
the Acquired Facilities from and after the Closing and (b) the required
certification by the appropriate Medicaid agencies and/or fiscal intermediaries
necessary to enable Purchaser to bill and receive payment under the Medicaid
program. The Purchaser has no reason

                                       15



to believe that all of the Purchaser Required Consents will not be obtained.
Subject to obtaining the Purchaser Required Consents specified on SCHEDULE 3.3,
the execution, delivery and performance of this Agreement and the other
instruments, documents and agreements contemplated hereby by the Sellers will
not result in any violation of, be in conflict with or constitute a default
under, any law, statute, regulation, ordinance, agreement, contract, instrument,
license, permit, authorization, judgment, decree or order to which Purchaser is
a party or by which Purchaser is bound.

      3.4   BROKERS. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of the Purchaser in connection with this
Agreement or any of the Transactions, and no such Person is entitled to any fee,
payment, commission or other consideration in connection therewith as a result
of any arrangement made by the Purchaser.

      3.5   DISCLOSURE. The representations, warranties and other statements of
the Purchaser contained in this Agreement and the other documents, certificates
and written statements furnished to the Purchaser by or on behalf of the
Purchaser pursuant thereto, taken as a whole, do not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading

                                   ARTICLE 4.
                            COVENANTS OF THE SELLERS

      4.1   CONDUCT OF THE BUSINESS.

            (a)   The Sellers will cause each Company to, prior to the Closing:

                  (i)   maintain its corporate or limited liability company
      existence;

                  (ii)  use all reasonable efforts to preserve the Business and
      its business organization intact, retain its permits, licenses and
      franchises, preserve the existing contracts and goodwill of its customers,
      suppliers, personnel and others having business relations with it;

                  (iii) conduct its business only in the ordinary course
      (including without limitation the collection of receivables and the
      payment of payables); and

                  (iv)  use all reasonable efforts to operate in such a manner
      as to assure that the representations and warranties of the Sellers set
      forth in this Agreement on the date hereof will be true and correct as of
      the Closing Date with the same force and effect as if such representations
      and warranties had been made on and as of the Closing Date.

            (b)   Except as set forth on SCHEDULE 4.1(b), the Sellers will cause
each Company not to, prior to the Closing, without the Purchaser's prior written
consent (such consent not to be unreasonably withheld or delayed):

                  (i)   change its method of management or operations in any
      material respect;

                  (ii)  dispose of or acquire any material assets or properties
      or make any commitment to do so, other than inventory in the ordinary
      course of business;

                  (iii) subject any of its properties or assets to any lien,
      security interest, mortgage or encumbrance, in each case other than in the
      ordinary course of business;

                  (iv)  modify, amend, cancel or terminate any Material Contract
      or any other existing agreement, contract or instrument material to any
      Company or the Business;

                  (v)   make any change in the compensation paid or payable to
      any officer, director, employee, agent, representative or consultant as
      shown or required to be shown on a schedule hereto, or

                                       16



      pay or agree to pay any bonus or similar payment (other than bonus
      payments or other amounts to which any Company is committed and which are
      expressly disclosed in this Agreement or a schedule hereto);

                  (vi)  promote, change the job title of, or otherwise alter in
      any material respect the responsibilities or duties of, any management
      employee or officer of any Company;

                  (vii) enter into any lease, contract or agreement that if in
      existence on the date hereof would have constituted a Material Contract;

                  (viii) make any change in its accounting practices or
      procedures;

                  (ix)  change its customer pricing, rebates or discounts, other
      than in the ordinary course of business;

                  (x)   take any other action which could have a material
      adverse effect on the Business or the affairs, assets, condition
      (financial or otherwise) or prospects of any Company, or could adversely
      affect or detract from the value of any Company, its assets or the
      Business; or

                  (xi)  commit to do any of the foregoing referred to in clauses
      (i) - (x).

      4.2   EFFORTS. The Sellers will use all reasonable efforts (a) to cause
the conditions specified in ARTICLE 6 to be satisfied as soon as practicable,
and (b) to assist Purchaser in its due diligence efforts, including but not
limited to the actions described in Section 1.7.

      4.3   EXCLUSIVITY. Until the termination of this Agreement, Sellers will
not, and will cause each Company's equity owners, members, managers, officers,
directors, employees and agents not to solicit or enter into any discussions or
negotiations with, or furnish or cause to be furnished any information
concerning a Company to any person or entity (other than Purchaser and its
officers, managers, employees and agents) in connection with any proposed
acquisition of all or a portion of a Company, whether by merger, purchase of
equity interests, sale of the assets (not in the ordinary course of business) or
other acquisition or business combination involving any Company. Each Seller
agrees to promptly disclose to the Purchaser all such unsolicited offers or
indications of interest and the terms thereof.

      4.4   CONFIDENTIALITY. Following the Closing, each Seller shall not,
directly or indirectly, disclose, divulge or make use of any trade secrets or
other information of a business, financial, marketing, technical or other nature
pertaining to any Company or the Business, including information of others that
any Company has agreed to keep confidential, except to the extent that such
information shall have become public knowledge other than by breach of this
Agreement by any of the Sellers and except to the extent that disclosure of such
information is required by law.

      4.5   NON-COMPETITION AND NON-SOLICITATION COVENANTS.

            (a)   For a period of five years after the Closing, no Seller shall,
directly or indirectly, or as a stockholder, partner, member, manager, employee,
consultant or other owner or participant in any Person other than the Purchaser,
engage in or assist any other Person to engage in any business in which any
Company is engaged or in which any Company is planning to engage or is
considering engaging on the date hereof, anywhere within 25 miles from any
Company or from any Acquired Facility without the prior written consent of the
Purchaser; provided, however, any Seller may request that the Purchaser consent,
in writing, to a consulting engagement or activity which may violate the terms
of this Section 4.5 and such consent shall not be unreasonably withheld.

            (b)   For a period of five years after the Closing, no Seller shall,
directly or indirectly, solicit, endeavor to entice away from the Purchaser or
any of its Affiliates, or offer employment or a consulting or other position to,
or otherwise interfere with the business relationship of the Purchaser or any of
its Affiliates with, any Person who is, or was within the one-year period prior
thereto, a customer or employee of, consultant or supplier to, referral source
for or other Person having a material business relationship with, the Purchaser
or any of its Affiliates.

                                       17



            (c)   The foregoing covenants shall not be applicable to any Seller
that enters into any form of agreement with non-competition and non-solicitation
covenants with Purchaser.

      4.6   INJUNCTIVE RELIEF; LIMITATION ON SCOPE. Each of the Sellers
acknowledges that any breach or threatened breach of the provisions of Sections
4.3, 4.4 or 4.5 of this Agreement will cause irreparable injury to the Purchaser
for which an adequate monetary remedy does not exist. Accordingly, in the event
of any such breach or threatened breach, the Purchaser shall be entitled, in
addition to the exercise of other remedies, to seek and (subject to court
approval) obtain injunctive relief, without necessity of posting a bond,
restraining the Sellers from committing such breach or threatened breach. The
right provided under this Section 4.6 shall be in addition to, and not in lieu
of, any other rights and remedies available to the Purchaser. The Sellers
further acknowledge that the provisions of Sections 4.4 and 4.5 of this
Agreement are made as a material inducement to the Purchaser and its Affiliates
to consummate the Transactions contemplated by this Agreement, which
Transactions are of substantial benefit to the Sellers, and that such provisions
are reasonable in geographic scope, duration, activity and subject.

      4.7   DELIVERY OF FINANCIAL STATEMENTS. From the date hereof until the
Closing, the Sellers will deliver to the Purchaser, not later than 30 days after
the end of each month, an unaudited, consolidated balance sheet as of the end of
such month and unaudited, consolidated statements of cash flows, income and
members' equity for the Companies for such month. The Sellers covenant and agree
that such financial statements and the notes thereto, if any, shall be complete
and accurate in all material respects and fairly present the financial condition
of the Companies at the respective dates thereof and the results of their
operations for the respective months then ended, and shall be prepared in
accordance with the books and records of the Companies in conformity with
generally accepted accounting principles, consistently applied with the
financial statements referred to in Section 2.4, except for the omission of
footnotes and normal, immaterial year-end adjustments.

      4.8   USE OF Name. Following the Closing, the Purchaser shall have the
exclusive right to use the names "Holmesdale," "Carmel Hills", and "Liberty
Terrace" and any derivations thereof, in connection with the operation of the
Business; provided, however, that Sellers shall not be obligated to change the
existing names of any of their corporations or other entities.

      4.9   BROKER FEES. The Beneficial Owners shall be jointly and severally
responsible for paying any and all broker fees, expenses or other payments
incurred by the Beneficial Owners in connection with the Transactions, including
those incurred with respect to Senior Living Investment Brokerage, Inc.

      4.10  ACCRUED PTO. As soon as reasonably practicable following the
Closing, Sellers shall pay all Accrued PTO obligations of the Companies relating
to a period prior to the Closing.

                                   ARTICLE 5.
                           COVENANTS OF THE PURCHASER

      5.1   REPRESENTATIONS AND WARRANTIES. Until the Closing Date, the
Purchaser will not take any action that would cause any of the representations
and warranties made by the Purchaser in this Agreement not to be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had been made on and
as of the Closing Date.

      5.2   EFFORTS. The Purchaser will use all commercially reasonable efforts
to cause the conditions specified in ARTICLE 6 to be satisfied as soon as
practicable.

      5.3   CONFIDENTIALITY. Pending the Closing, all proprietary information
obtained by the Purchaser from or on behalf of any Company will be kept
confidential and will not be disclosed by the Purchaser other than to its
partners, members, managers, directors, officers, employees, and advisors, as
necessary; provided that the foregoing restriction shall not apply to
information which (a) is lawfully and independently obtained by the Purchaser
from a third party without restriction as to disclosure by the Purchaser, (b)
was known by the Purchaser prior to its disclosure by or on behalf of any
Company, (c) is in the public domain or enters into the public domain through no
fault of the Purchaser, (d) is independently developed by the Purchaser without
reference to information provided by or on behalf of any Company or (e) the
Purchaser is required by law or legal process to disclose. If this Agreement

                                       18



is terminated, and if requested in writing by the Sellers, the Purchaser will
cause to be delivered to the Sellers all materials obtained by the Purchaser
from or on behalf of any Company, whether obtained before or after the date of
this Agreement.

      5.4   ADMINISTRATIVE FILINGS AND APPEALS. Purchaser shall have
responsibility for preparation of all applications for governmental approvals
required as a condition to Closing as set forth herein, and of any filings and
applications made pursuant thereto, including but not limited to the preparation
of any application or statement to be made to any governmental body. Sellers
shall reasonably cooperate in the preparation of such applications and filings
and, if necessary, join in any such applications.

      5.5   PUBLIC ANNOUNCEMENTS. Purchaser shall consult with and obtain the
agreement of Sellers before issuing any press release or otherwise making any
public statement with respect to this Agreement or the transactions contemplated
hereunder and shall not issue any such press release or make any such public
statement prior to such consultation or agreement, provided, however, in case of
any press release or public statement which may be required by applicable law or
any contract or agreement of the Purchaser, Purchaser will not, to the extent
reasonably possible, issue any such press release or make any such public
statement prior to consulting with the Sellers. Each party hereto agrees that it
will not unreasonably withhold any such consent or issue any press release or
make any public statement.

                                   ARTICLE 6.
                              CONDITIONS TO CLOSING

      6.1   CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS. The obligation of
the parties to consummate the transactions contemplated hereby shall be subject
to the fulfillment to the satisfaction of, or waiver by, the parties of each of
the following conditions on or prior to the Closing:

            (a)   NO TERMINATION. This Agreement shall not have been terminated
pursuant to ARTICLE 7.

            (b)   No ADVERSE PROCEEDINGS. On the Closing Date, no action or
proceeding shall be pending before any governmental authority to restrain,
enjoin or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby or to recover any damages or obtain other
relief as a result of the transactions proposed hereby.

            (c)   NO VIOLATIONS. The consummation of the Transactions shall not
violate any governmental rule which could have a material adverse effect on the
Business or the affairs, assets, condition (financial or otherwise) or prospects
of any Company, and which is incapable of being cured.

      6.2   CONDITIONS TO OBLIGATIONS OF THE PURCHASER. Unless waived in writing
by the Purchaser, the obligation of the Purchaser hereunder to consummate the
Transactions is subject to the satisfaction at or prior to the Closing of the
following conditions:

            (a)   REPRESENTATIONS AND WARRANTIES TRUE. The representations and
                  warranties of the Sellers contained in ARTICLE 2 shall be true
and accurate in all material respects (except that the representations and
warranties in Sections 2.1 and 2.2, and each other representation or warranty to
the extent qualified by materiality, shall be true and correct in all respects)
on and as of the Closing Date with the same effect as though made on and as of
such date.

            (b)   COVENANTS PERFORMED. Each of the Sellers shall have performed
and complied in all material respects with the covenants, agreements and
conditions required to be performed or complied with by them hereunder on or
prior to the Closing Date.

            (c)   COMPLIANCE CERTIFICATE. The Purchaser shall have received a
certificate of the Sellers certifying as to the matters set forth in Sections
6.2(a) and 6.2(b) above.

                                       19



            (d)   CERTIFICATES; DOCUMENTS. The Purchaser shall have received
copies of each of the following for each of the Companies, certified to its
satisfaction by an officer of each such Company: (i) the Company's Certificate
of Incorporation, as amended, certified by the Secretary of State of the state
of its organization as of a recent date, or the Company's Certificate of
Formation, as amended, certified by the Secretary of State of the state of its
organization as of a recent date; (ii) a form of bylaws applicable to each
Company that is a corporation, and a form of LLC Operating Agreement applicable
to each Company that is a limited liability company (together with a
certification that the actual bylaws or LLC Operating Agreement, as the case may
be, for each such Company is substantially in the form of the documents
provided); (iii) if applicable, resolutions and votes from each Company's Board
of Directors and stockholders, members or similar Persons authorizing M. Terence
Reardon to sign this Agreement and take all actions necessary to consummate the
transactions contemplated hereby, and (iv) a certificate of the Secretary of
State of its state of organization as of a recent date as to the legal existence
and good standing of the Company. The Sellers shall have used commercially
reasonable efforts, and cooperated with Purchaser, in an effort to obtain a
certificate of good standing for each Company from the Secretary of State of the
State of Missouri. The Purchaser shall also have received such other
certificates, documents and materials as it shall reasonably request.

            (e)   SELLER REQUIRED CONSENTS, CERTIFICATION AND LICENSES RECEIVED.
The Sellers shall have obtained and delivered to the Purchaser copies of (i) all
Sellers' Required Consents listed on or required to be listed on SCHEDULE 2.15,
and (ii) all other consents, licenses, approvals, permits or authorizations
which are identified in writing by the Purchaser on or prior to January 31, 2006
and are required to be obtained for the Transactions contemplated hereby and as
to which the failure to obtain the same could have a material adverse effect on
the Business or the affairs, assets, condition (financial or otherwise) or
prospects of any Company, or interfere with the Purchaser's right or ability to
consummate the Transactions.

            (f)   PURCHASER REQUIRED CONSENTS, CERTIFICATION AND LICENSES
RECEIVED. The Purchaser shall have obtained and delivered to the Sellers copies
of all Purchaser Required Consents listed on SCHEDULE 3.3 and no such Purchaser
Required Consents shall have been withdrawn or suspended. Without limiting the
generality of the foregoing, the Purchasers' Required Consents shall include (a)
any and all local, state and federal licenses necessary to enable Purchaser to
operate the Acquired Facilities from and after the Closing and (b) the required
certification by the appropriate Medicaid agencies and/or fiscal intermediaries
necessary to enable Purchaser to bill and receive payment under the Medicaid
program.

            (g)   INSTRUMENTS OF TRANSFER. Each Company shall have delivered to
the Purchaser such bills of sale, leases, assignments and other instruments of
transfer as the Purchaser may reasonably require to transfer to it good and
marketable title to the Purchased Assets, free and clear of all liens, security
interests, mortgages, encumbrances and restrictions of every kind.

            (h)   NO INJUNCTION. The consummation of the Transactions
contemplated hereby shall not violate any order, decree or judgment of any court
or governmental body having competent jurisdiction.

            (i)   PURCHASE OF OWNED PROPERTY. The Purchaser shall have (i)
completed its review of the environmental condition of the Owned Property
pursuant to Section 1.7(c), (ii) resolved any objections to title set forth in a
Title Notice or Gap Notice in accordance with Sections 1.6(b) and 1.6(c), and
(iii) received unconditional commitments from a title company to issue the Title
Policy.

            (j)   OPERATIONS TRANSFER AGREEMENT. On or prior to January 31,
2006, each of the Companies that operates a skilled nursing facility and/or a
residential care facility and the Purchaser shall have entered into an
operations transfer agreement substantially in the form attached hereto as
Exhibit 6.2(j) (the "OPERATIONS TRANSFER AGREEMENT").

            (k)   ADVERSE CHANGE OR CONDITION. Since the Balance Sheet Date,
there shall have been no event which has had or, together with any other events,
could have a material adverse effect on the Business or the affairs, assets or
prospects of any Company, whether or not such effect is foreseeable, and since
the execution of this Agreement, the Purchaser shall have become aware of no
development or event adversely affecting the Business or its prospects.

                                       20



            (l)   INSURANCE COVERAGE. The Sellers shall have provided evidence
reasonably satisfactory to Purchaser that the Sellers have arranged for
insurance coverage adequate to insure, or assets (including any trust account
established for this purpose) sufficient to self insure, against all
liabilities, claims and risks against which it is customary for companies
similarly situated as the Companies to insure, to remain in full force and
effect to cover claims brought after the Closing where the events giving rise to
such claims occurred prior to the Closing; provided, however, this condition
will be deemed satisfied if Sellers' liability trust established for this
purpose has at least Three Hundred Thousand Dollars ($300,000) in assets or
cash.

            (m)   ACTIONS AND PROCEEDINGS. Prior to the Closing, all actions,
proceedings, instruments and documents required to carry out the transactions
contemplated hereby or incident hereto and all other legal matters required for
such transactions shall have been reasonably satisfactory to counsel for the
Purchaser.

            (n)   NO BAN ON NEW ADMISSIONS. None of the Acquired Facilities
shall be operating under a ban on new admissions or an order of denial of
payment for new admissions.

            (o)   MDS FORMS AND CERTIFICATIONS. The Sellers shall have delivered
a certificate stating that there are current, complete and signed MDS forms and
physician certifications in the medical record of each patient included in the
patient census for all Acquired Facilities.

            (p)   LIST OF SERVICE PROVIDERS. Prior to the Closing, Sellers shall
provide to Purchaser a schedule setting forth a complete list of all of the
physicians, physical therapists, occupational therapists, nutritionists and
other health care providers who provide medical or other services to residents
of the Companies on an independent contractor basis, and the material terms of
such arrangements.

            (q)   EMPLOYEES. Seventy-five percent (75%) of the employees listed
on SCHEDULE 2.21(d) have agreed to initially accept employment with Purchaser,
provided, however, that this condition will be deemed satisfied with respect to
any employee who was not offered employment on similar terms from the Purchaser
following the Closing.

            (r)   MEDICAID ESCROW AGREEMENTS. On or prior to the Closing, each
of the Companies that operates a skilled nursing facility and/or a residential
care facility and the Purchaser and the Sellers shall have entered into the
Medicaid Escrow Agreements with the Medicaid Escrow Agent substantially in the
form attached hereto as Exhibit 6.2(r).

            (s)   CONSULTING AGREEMENT. The Consulting Agreement shall not have
been terminated or withdrawn and will be in full force and effect immediately
after the consummation of the Transactions contemplated hereby.

      6.3   CONDITIONS TO OBLIGATIONS OF THE SELLERS. Unless waived in writing
by the Beneficial Owners, the obligation of the Sellers hereunder to consummate
the Transactions is subject to the satisfaction at or prior to the Closing of
the following conditions:

            (a)   REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties contained in ARTICLE 3 shall be true and accurate in all material
respects (except that each representation or warranty to the extent qualified by
materiality, shall be true and correct in all respects) on and as of the Closing
Date with the same effect as though made on and as of such date.

            (b)   COVENANTS PERFORMED. The Purchaser shall have performed and
complied in all material respects with the covenants, agreements and conditions
required to be performed or complied with by it hereunder on or prior to the
Closing Date.

            (c)   COMPLIANCE CERTIFICATE. The Sellers shall have received a
certificate of the Purchaser certifying as to the matters set forth in Sections
6.3(a) and (b) above.

                                       21



            (d)   PURCHASER REQUIRED CONSENTS, CERTIFICATION AND LICENSES
RECEIVED. The Purchaser shall have obtained and delivered to the Sellers copies
of all Purchaser Required Consents listed on SCHEDULE 3.3 and no such Purchaser
Required Consents shall have been withdrawn or suspended.

            (e)   NO INJUNCTION. The consummation of the Transactions
contemplated hereby shall not violate any order, decree or judgment of any court
or governmental body having competent jurisdiction.

            (f)   CERTIFICATES; DOCUMENTS. The Sellers shall have received
copies of each of the following for the Purchaser, certified to its satisfaction
by an officer of the Purchaser: (i) the Purchaser's Certificate of
Incorporation, as amended, certified by the Secretary of State of Delaware as of
a recent date; (ii) a form of bylaws applicable to each Company that is a
corporation, and a form of LLC Operating Agreement applicable to each Company
that is a limited liability company (together with a certification that the
actual bylaws or LLC Operating Agreement, as the case may be, for each such
Company is substantially in the form of the documents provided); (iii) if
applicable, resolutions and votes from each Company's Board of Directors and
stockholders, members or similar Persons authorizing Beneficial Owners to sign
this Agreement and take all actions necessary to consummate the transactions
contemplated hereby, and (iv) a certificate of the Secretary of State of its
state of organization as of a recent date as to the legal existence and good
standing of the Company. The Sellers shall have used commercially reasonable
efforts, and cooperated with Purchaser, in an effort to obtain a certificate of
good standing for each Company from the Secretary of State of the State of
Missouri. The Purchaser shall also have received such other certificates,
documents and materials as it shall reasonably request.

            (g)   ACTIONS AND PROCEEDINGS. Prior to the Closing, all actions,
proceedings, instruments and documents required to carry out the Transactions
contemplated hereby or incident hereto and all other legal matters required for
such Transactions shall have been reasonably satisfactory to counsel for the
Sellers.

                                   ARTICLE 7.
                                  TERMINATION

      7.1   TERMINATION. This Agreement and the Transactions contemplated hereby
may be terminated at any time prior to the Closing:

            (a)   by mutual written consent of the Purchaser and the Sellers;

            (b)   by the Purchaser, if any Seller shall have breached or failed
to perform in any material respect any of such Seller's obligations, covenants
or agreements under this Agreement, or if any of the representations and
warranties of any Seller set forth in this Agreement shall not be true and
correct to the extent set forth in Section 6.2(a), and such breach, failure or
misrepresentation is not cured to the Purchaser's reasonable satisfaction within
30 days after the Purchaser gives the Sellers written notice identifying such
breach, failure or misrepresentation;

            (c)   by the Sellers, if the Purchaser shall have breached or failed
to perform in any material respect any of its obligations, covenants or
agreements under this Agreement, or any of the representations and warranties of
the Purchaser set forth in this Agreement shall not be true and correct to the
extent set forth in Section 6.3(a), and such breach, failure or
misrepresentation is not cured to the Sellers' reasonable satisfaction within 30
days after the Sellers give the Purchaser written notice identifying such
breach, failure or misrepresentation;

            (d)   by either party, if the conditions set forth in Section 6.1
become incapable of satisfaction;

            (e)   by the Purchaser, if the conditions set forth in Section 6.2
become incapable of satisfaction; (f) by the Purchaser, in accordance with
Section 1.6 or Section 1.7(c); (g) by the Sellers, if the conditions set forth
in Section 6.3 become incapable of satisfaction;

                                       22



            (h)   by the Purchaser or the Sellers, if the Closing shall not have
occurred on or before March 31, 2006 or such other date, if any, as the
Purchaser and the Sellers may agree in writing; or

            (i)   by the Purchaser prior to January 31, 2006, if the Purchaser
is not satisfied with its due diligence review of the Purchased Assets and the
Business in any respect, as determined by Purchaser in its reasonable
discretion;

except that this Agreement may not be terminated under this Section by or on
behalf of any party that is in breach of any representation or warranty or in
violation of any covenant or agreement contained herein.

      7.2   EFFECT OF TERMINATION.

            (a)   If, and only if, (i) this Agreement is terminated by the
Sellers pursuant to Section 7. 1(c), and (ii) none of the Sellers is in material
breach of any representation or warranty contained herein, or material violation
or any covenant or agreement contained herein, then the Purchaser and the
Sellers shall instruct the Escrow Agent to deliver the Deposit, together with
any interest thereon, immediately to the Sellers. Delivery of such amount to the
Sellers pursuant to this Section 7.2(a) shall be as liquidated damages and not
as a penalty, and shall be the Sellers' exclusive remedy, and neither the
Purchaser nor any of its Affiliates shall have any other liability or obligation
to the Sellers hereunder, or with respect to the Transactions contemplated
hereby. Such liquidated damages have been computed and estimated as a reasonable
forecast of the probable actual loss to the Sellers because of the difficulty of
estimating with exactness the damages which would actually result.

            (b)   If this Agreement is terminated in any manner, or under any
circumstance (other than as set forth in Section 7.2(a) above), including but
not limited to the circumstances contemplated under Section 1.6 or Section
1.7(c); then the Sellers and the Purchaser shall immediately instruct the Escrow
Agent to deliver the Deposit, together with any interest thereon, immediately to
the Purchaser, and the Purchaser and its affiliates shall have no further
liability or obligation to the Sellers hereunder, or with respect to the
Transactions contemplated hereby.

            (c)   If the Purchaser terminates this Agreement at a time when any
of the Sellers are in material breach of any representation or warranty
contained herein, or in material violation of any covenant or agreement
contained herein, then, in addition to the rights and obligations of the parties
under Subsection (b) above, the Sellers shall remain liable for such breaches
and violations, and nothing contained herein shall be deemed to restrict the
rights and remedies available to the Purchaser against such party or parties.
(d) The obligations of the Purchaser under Section 5.3 shall survive the
termination of this Agreement for a period of one year.

                              ARTICLE 8. SURVIVAL;
                                 INDEMNIFICATION

      8.1   SURVIVAL. The representations, warranties, covenants and agreements
contained herein shall survive the Closing. No action for a breach of the
representations, warranties, covenants, or agreements contained herein nor any
demand for indemnification shall be brought more than two years following the
Closing Date, except for claims or potential claims of which the Sellers have
been notified with reasonable specificity by the Purchaser, or claims of which
the Purchaser has been notified with reasonable specificity by the Sellers,
within such two-year period.

      8.2   INDEMNIFICATION BY THE SELLERS.

            (a)   GENERAL. Subject to any applicable limitations set forth below
in this Section 8.2, the Sellers shall, jointly and severally, indemnify and
hold the Purchaser and its Affiliates harmless from and against all claims,
liabilities, obligations, costs, damages, losses and expenses (including
reasonable attorneys fees) of any nature, except for Lost Profit Losses which
are defined and set forth in Section 8.2(b) below (collectively, "Losses")
arising out of or relating to (i) any breach or violation of the
representations, warranties, covenants or agreements of

                                       23



the Sellers set forth in this Agreement, in the Operations Transfer Agreements,
or in any certificate or document delivered by the Sellers pursuant to this
Agreement, (ii) any lien, security interest, mortgage, restriction or
encumbrance on the Purchased Assets after the Closing as a result of matters
existing or relating to any period prior to the Closing, or (iii) any Excluded
Liability (regardless of whether information with respect thereto is set forth
on a Schedule hereto).

            (b)   Subject to any applicable limitations set forth below in this
Section 8.2, the Sellers shall, jointly and severally, indemnify the Purchaser
and its assignees designated pursuant to the introductory paragraph of this
Agreement for lost profits of the Business (collectively, "LOST PROFIT Losses")
to the extent that such Lost Profit Losses are caused by any breach or violation
of the representations, warranties, covenants or agreements of the Sellers set
forth in this Agreement, in the Operations Transfer Agreements, or in any
certificate or document delivered by the Sellers pursuant to this Agreement.

            (c)   If the Closing occurs, (i) no Company shall have any
obligation to indemnify or be liable with respect to that portion of Losses or
Lost Profit Losses in excess of the total amount of the Purchase Price allocated
to such Company on Schedule 1.5, and (ii) no Beneficial Owner shall have any
obligation to indemnify or be liable with respect to that portion of Losses or
Lost Profit Losses in excess of the product of (x) such Beneficial Owner's
percentage interest in all Companies multiplied by (y) the total amount of the
Purchase Price allocated to such Companies on Schedule 1.5; provided, that (i)
claims arising out of the representations and warranties contained in Sections
2.3, 2.14, 2.16, 2.22, or 2.23 (the "SPECIFIED REPRESENTATIONS") and (ii)
indemnification claims pursuant to subsection (iii) of Section 8.2(a) shall not
be subject to the foregoing limitation and shall not be included in the
determination of whether the limit in this Section 8.2 has been reached.

            (d)   Notwithstanding anything in this Agreement to the contrary,
the maximum amount of the obligation of the Sellers under this Section 8.2 or
under any other provision of this Agreement to Purchaser and its Affiliates
shall be subject to the following limitation:

                  (i)   No Seller shall have any liability pursuant to Section
      8.2(a) until the aggregate Losses suffered or incurred by Purchaser for
      which Purchaser is entitled to indemnification hereunder exceeds Fifty
      Thousand Dollars ($50,000) (the "THRESHOLD"). The parties acknowledge and
      agree that the Threshold shall be a deductible, and that Sellers shall
      only have liability hereunder for Losses over and above the Threshold.

                  (ii)  No Seller shall have any liability pursuant to Section
      8.2(b) until the aggregate Lost Profit Losses suffered or incurred by
      Purchaser for which Purchaser is entitled to indemnification hereunder
      exceeds Five Hundred Thousand Dollars ($500,000) (the "LOST PROFIT
      THRESHOLD"). The parties acknowledge and agree that the Lost Profit
      Threshold shall be a deductible, and that Sellers shall only have
      liability hereunder for Lost Profit Losses over and above the Lost Profit
      Threshold.

                  (iii) The limitation set forth above shall not apply to
      conduct of the Sellers constituting fraud or intentional misrepresentation
      or any breach of the Operations Transfer Agreements.

      8.3   INDEMNIFICATION BY THE PURCHASER. The Purchaser shall indemnify and
hold the Sellers harmless from and against all Losses arising out of or relating
to any breach or violation of the representations, warranties, covenants or
agreements of the Purchaser set forth in this Agreement.

      8.4   CALCULATION OF LOSSES. The amount of Losses and Lost Profit Losses
incurred by a party seeking indemnification hereunder shall be calculated after
taking into account insurance proceeds and other third party recoveries by, and
tax costs and benefits to, such party.

      8.5   DEFENSE OF CLAIMS. Upon acknowledgement in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or action, the
indemnifying party shall be entitled, if it so elects at its own cost, risk and
expense, (i) to take control of the defense and investigation of such lawsuit or
action, (ii) to employ and engage attorneys of its own choice to handle and
defend the same unless the named parties to such action or proceeding include
both the indemnifying

                                       24



party and the indemnified party and the indemnified party has been advised in
writing by counsel that there may be one or more legal defenses available to
such indemnified party that are different from or additional to those available
to the indemnifying party, in which event the indemnified party shall be
entitled, at the indemnified party's cost, risk and expense, to separate counsel
of its own choosing, and (iii) to compromise or settle such claim, which
compromise or settlement shall be made only with the written consent of the
indemnified party, such consent not to be unreasonably withheld.

                                   ARTICLE 9.
                                  MISCELLANEOUS

      9.1   NOTICES. All notices, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered in
person, or by United States mail, certified or registered with return receipt
requested, or by a nationally recognized overnight courier service, or otherwise
actually delivered:

            (a)   if to the Sellers, to:

                  M. Terence Reardon
                  9101 Buena Vista
                  Prairie Village, Kansas 66207

                  with a copy (which shall not constitute notice) to:

                  Senior Living Investment
                  Brokerage 20 Allen
                  Avenue, Suite 410 St.
                  Louis, MO 63119
                  Attention: Jeff Binder

                  and with a copy (which shall not constitute notice) to:

                  Blackwell Sanders Peper
                  Martin LLP 4801 Main St.,
                  Suite 1000 Kansas City,
                  MO 64112 Attention: Linda
                  K. Tiller

            (b)   if to the Purchaser, to:

                  Skilled Healthcare
                  Group, Inc. 27442
                  Portola Parkway, Suite
                  200 Foothill Ranch, CA
                  92610 Attention:
                  General Counsel

                  with a copy (which shall not constitute notice) to:

                  Latham & Watkins LLP
                  650 Town Center Drive,
                  20th Floor Costa Mesa,
                  CA 92626 Attention:
                  Derek D. Dundas David
                  C. Meckler

or at such other address as may have been furnished by such person in writing to
the other parties.

      9.2   Severability AND Governing Law. This Agreement shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision hereof shall be prohibited or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating or

                                       25



nullifying the remainder of such provision or any other provisions of this
Agreement. If any one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, such provisions shall be construed by
limiting and reducing it so as to be enforceable to the maximum extent permitted
by applicable law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Missouri, without regard to
its conflicts of laws principles.

      9.3   AMENDMENTS, WAIVERS. This Agreement may be amended or modified only
with the written consent of the Purchaser and the Sellers. No waiver of any term
or provision hereof shall be effective unless in writing signed by the party
waiving such term or provision. No failure to exercise or delay in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights provided hereunder are cumulative and not
exclusive of any rights, powers or remedies provided by law.

      9.4   EXPENSES. Whether or not the Transactions contemplated hereby are
consummated, (a) the legal, accounting, financing and due diligence expenses
incurred by the Purchaser in connection with the Transactions will be borne by
the Purchaser and (b) the legal and other costs and expenses incurred by the
Beneficial Owners or any Company in connection with the Transactions
contemplated hereby will be borne by the Sellers.

      9.5   SUCCESSORS AND ASSIGNS. This Agreement, and all provisions hereof,
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto, provided that this Agreement may not be assigned
by any party without the prior written consent of the other parties hereto
except that (a) the indemnification and other rights hereunder of a party may be
assigned to any bank or other financial institution which is or becomes a lender
to the Purchaser or any of its successors and assigns and (b) this Agreement may
be assigned by the Purchaser to any of its Affiliates or, to any Person
acquiring a material portion of the assets, business or securities of the
Purchaser, whether by merger, consolidation, sale of assets or securities or
otherwise.

      9.6   ENTIRE AGREEMENT. This Agreement, the attached exhibits and
schedules, and the other agreements, documents and instruments contemplated
hereby contain the entire understanding of the parties, and there are no further
or other agreements or understanding, written or oral, in effect between the
parties relating to the subject matter hereof unless expressly referred to
herein.

      9.7   COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and with counterpart facsimile signature pages, each of which
shall be an original, but all of which when taken together shall constitute one
and the same Agreement.

      9.8   HEADINGS. The headings of Articles and Sections herein are inserted
for convenience of reference only and shall be ignored in the construction or
interpretation hereof.

      9.9   FURTHER ASSURANCES. Following the Closing, the Sellers will execute
and deliver to the Purchaser such documents and take such other actions as the
Purchaser may reasonably request in order to fully consummate the Transactions.

      9.10  THIRD PARTY BENEFICIARIES. Nothing in the Agreement shall be
construed to confer any right, benefit or remedy upon any Person that is not a
party hereto or a permitted assignee of a party hereto.

      9.11  NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other agreements and
documents contemplated herein. In the event an ambiguity or question of intent
or interpretation arises under any provision of this Agreement or any other
agreement or documents contemplated herein, this Agreement and such other
agreements or documents shall be construed as if drafted jointly by the parties
thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authoring any of the provisions of this
Agreement or any other agreements or documents contemplated herein.

                                       26



      9.12  SCHEDULES AND Exhibits. All schedules (as the same may be updated as
provided herein) and exhibits to this Agreement are an integral part of this
Agreement and are incorporated herein by reference. All Schedules delivered with
this Agreement shall be arranged to correspond with the numbered and lettered
Sections and Subsections contained in this Agreement, and the disclosures in
such Schedules shall qualify only the corresponding Sections and Subsections
contained in this Agreement, unless otherwise expressly provided herein.

                                  ARTICLE 10.
                                   DEFINITIONS

      The following terms, as used in this Agreement, have the meanings given to
them where indicated below:



Term                                              SECTION OR PLACE WHERE DEFINED
- ----                                              ------------------------------
                                               
Accrued PTO                                           Section 1.4
Acquired Facilities                                   Section 2.1
Affiliate                                             Section 2.6
Agreement                                             Preamble
Assumed Liabilities                                   Section 1.4
Assumed Operating Contracts                           Section 1.1
Authorizations                                        Section 2.19
Balance Sheet                                         Section 2.4
Balance Sheet Date                                    Section 2.4
Beneficial Owners                                     Preamble
Benefit Plans                                         Section 2.22
Bonds                                                 Section 2.6
Business                                              Section 2.1
Closing                                               Section 1.8
Closing Date                                          Section 1.8
Code                                                  Section 2.22
Company or Companies                                  Preamble
Company Deposits                                      Section 2.6
Company Intellectual Property                         Section 2.10
Consulting Agreement                                  Introduction
Deed                                                  Section 1.6(e)
Deposit                                               Section 1.3(c)
Equity Interests                                      Introduction
ERISA                                                 Section 2.22
Escrow Agent                                          Section 1.3(c)
Escrow Fund                                           Exhibit 1.3(c)
Excluded Assets                                       Section 1.2
Excluded Liabilities                                  Section 1.4
Gap Notice                                            Section 1.6(c)
HIPAA                                                 Section 2.16
Improvements                                          Section 1.1
Inspection Period                                     Section 1.7
Insurance Policies                                    Section 2.24
Intellectual Property                                 Section 2.10
Knowledge of Sellers                                  Preamble to Article 2


                                       27





TERM                                              SECTION OR PLACE WHERE DEFINED
- ----                                              ------------------------------
                                               
Losses                                                    Section 8.2
Lost Profit Losses                                        Section 8.2
Lost Profit Threshold                                     Section 8.2
Material Contracts                                        Section 2.6
Material Customers                                        Section 2.12
Medicaid Escrow Agent                                     Section 1.3
Medicaid Escrow Agreement                                 Section 1.3
Medicaid Escrow Amount                                    Section 1.3
Medical Waste Laws                                        Section 2.23
Operations Transfer Agreement                             Section 6.2
Owned Property                                            Section 2.7
Permitted Encumbrances                                    Section 1.3(b)
Permitted Exceptions                                      Section 1.6(d)
Permitted Investments                                     Exhibit 1.3(c)
Person                                                    Section 2.10
Purchased Assets                                          Section 1.1
Purchase Price                                            Section 1.3
Purchaser                                                 Preamble
Purchaser Required Consents                               Section 3.3
Real Estate Survey                                        Section 1.6
Securities Act                                            Section 2.6
Seller or Sellers                                         Preamble
Sellers' Required Consents                                Section 2.15
Specified Representations                                 Section 8.2
Surveys                                                   Section 2.16
Taxes                                                     Section 1.4
Threshold                                                 Section 8.2
Title Inspection Period                                   Section 1.6
Title Notice                                              Section 1.6
Title Policy                                              Section 1.6(e)
Title Report                                              Section 1.6
Transactions                                              Introduction


                            [Signature Pages follow]

                                       28



      IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as a sealed instrument as of the date first above written.

                                        PURCHASER:

                                        SKILLED HEALTHCARE GROUP, INC.

                                        By: /s/ Jose Lynch
                                           -------------------------------------
                                        Name:  Jose Lynch
                                        Title: President


                                        SELLERS:

                                        HOLMESDALE CARE CENTER, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        HOLMESDALE DEVELOPMENT, LLC

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        CARMEL HILLS LIVING CENTER, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        CARMEL HILLS PROPERTY, LLC

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        LIBERTY TERRACE NURSING, LLC

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        LIBERTY TERRACE CARE CENTER, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                [Signature Page to the Asset Purchase Agreement]

                                      S-1



      IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as a sealed instrument as of the date first above written.

                                        PURCHASER:

                                        SKILLED HEALTHCARE GROUP, INC.

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        SELLERS:

                                        HOLMESDALE CARE CENTER, INC.

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: President

                                        HOLMESDALE DEVELOPMENT, LLC

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: Managing Member

                                        CARMEL HILLS LIVING CENTER, INC.

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: President

                                        CARMEL HILLS PROPERTY, LLC

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: Managing Member

                                        LIBERTY TERRACE NURSING, LLC

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: Managing Member

                                        LIBERTY TERRACE CARE CENTER, INC.

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        Name: M. Terence Reardon
                                        Title: President

                [Signature Page to the Asset Purchase Agreement]

                                      S-1



                                        BENEFICIAL OWNERS

                                        M. TERENCE REARDON TRUST

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        M. Terence Reardon, Co-Trustee

                                        By: /s/ M. Sue Reardon
                                           -------------------------------------
                                        M. Sue Reardon, Co-Trustee

                                        M. SUE REARDON TRUST

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        M. Terence Reardon, Co-Trustee

                                        By: /s/ M. Sue Reardon
                                           -------------------------------------
                                        M. Sue Reardon, Co-Trustee

                                        M. TERENCE REARDON

                                        By: /s/ M. Terence Reardon
                                           -------------------------------------
                                        M. Terence Reardon

                                        M. SUE REARDON

                                        By: /s/ M. Sue Reardon
                                           -------------------------------------
                                        M. Sue Reardon

                [Signature Page to the Asset Purchase Agreement]

                                       S-2



                                 ACKNOWLEDGMENT

      Escrow Agent executes this Agreement below as of the date first written
above solely for the purpose of acknowledging that it agrees to be bound by the
provisions of Sections 1.3(c) and 7.2 hereof.

ESCROW AGENT:

CHICAGO TITLE INSURANCE COMPANY,
a Missouri corporation

By: /s/ Gus Aguilar
   -------------------------------------
Name:  Gus Aguilar
Title: Assistant Vice President, Senior Escrow Officer

                [Signature Page to the Asset Purchase Agreement]

                                       S-3

                                 EXHIBIT 1.3(c)

                        ESCROW AGENT'S GENERAL PROVISIONS

(a)   APPOINTMENT OF ESCROW AGENT. Chicago Title Insurance Company is hereby
      appointed as the Escrow Agent under this Agreement, and the Escrow Agent
      hereby accepts such appointment.

(b)   DEPOSIT OF ESCROW FUND. Pursuant to this Agreement, the Purchaser has
      deposited, via wire transfer of immediately available funds, with the
      Escrow Agent the Deposit. The Deposit, together with all interest,
      dividends and other income earned with respect thereto, less amounts
      distributed from time to time in accordance herewith, is referred to
      herein as the "ESCROW FUND". The Escrow Fund will be held, invested and
      disbursed by the Escrow Agent in accordance with the terms hereof.

(c)   RELEASE OF ESCROW FUND. The Escrow Fund will be retained by the Escrow
      Agent and shall only be distributed pursuant to the following terms:

      (i)   RELEASE AT CLOSING. At the closing of the transactions contemplated
            by the Purchase Agreement, the Escrow Agent shall deliver the Escrow
            Fund by wire transfer of immediately available funds, as directed in
            joint written instructions from the Purchaser and the Beneficial
            Owners, to the Purchaser or to such account as the Purchaser shall
            direct, to be credited towards payment of the Purchase Price under
            the Purchase Agreement.

      (ii)  RELEASE AT REQUEST OF PURCHASER AND BENEFICIAL OWNERS.
            Notwithstanding any term in this Agreement to the contrary, the
            Escrow Agent shall release the Escrow Fund (on account of the
            termination of the Purchase Agreement or otherwise) in accordance
            with any joint written instructions received from the Beneficial
            Owners and the Purchaser. The Escrow Fund shall be delivered by wire
            transfer of immediately available funds to the Purchaser or the
            Beneficial Owners, as the case may be, two (2) business days after
            receipt by the Escrow Agent of such joint written instructions. In
            the event that the Escrow Agent has not received such joint written
            instructions, the Escrow Fund shall remain in escrow with the Escrow
            Agent until such time as the Escrow Agent receives a copy of a
            final, non-appealable order of a court of competent jurisdiction as
            to the disposition of the Escrow Fund, whereupon the Escrow Agent
            shall deliver the Escrow Fund in accordance with such court order.

      (iii) If at any time the Escrow Agent shall consider or be advised that
            any further agreements, assurances or other documents are reasonably
            necessary or desirable to carry out the provisions hereof and the
            transactions contemplated hereby, the parties hereto shall execute
            and deliver any and all such agreements or other documents, and do
            all things reasonably necessary or appropriate to carry out fully
            the provisions hereof.

      (iv)  Any wire transfers shall be made subject to, and in accordance with,
            the Escrow Agent's normal electronic funds transfer procedures.

(d)   INVESTMENT OF ESCROW FUND.

      (i)   The Escrow Agent shall invest and reinvest the Escrow Fund in
            Permitted Investments (as defined below) as directed by joint
            written instruction from the Purchaser and the Beneficial Owners;
            provided that such Permitted Investments shall have maturity dates
            that permit payments to be made from the Escrow Fund in accordance
            with the terms hereof. Absent its timely receipt of such specific
            written investment instructions, the Escrow Agent shall invest the
            Escrow Fund in any Permitted Investments. Investments pursuant to
            such investment instructions described above shall in all instances
            be subject to availability (including any time-of-day requirements).
            "PERMITTED INVESTMENTS" shall mean (i) savings or interest bearing
            accounts at Bank of America, (ii) readily marketable obligations of,
            or fully and unconditionally guaranteed (as to both principal and
            interest) by, the United States of America or an agency thereof
            available through Bank of America; (iii) negotiable certificates of
            deposit available at Bank of America; or (iv) shares of so-called
            "money market funds" available through Bank of America.

      (ii)  In no instance shall the Escrow Agent have any obligation to provide
            investment advice of any kind or to invest the Escrow Fund other
            than as expressly provided herein. The Escrow Agent shall not be
            responsible for any loss incurred upon any such investment made in
            good faith and under circumstances not constituting willful
            misconduct or gross negligence. The Escrow Agent may sell or
            liquidate investments in order to comply with this Agreement and
            instructions issued hereunder, and shall not be responsible for any
            loss due to interest rate fluctuation, early withdrawal penalty or
            market value changes. The Purchaser and the Beneficial Owners
            understand that investments of the Escrow Fund are not necessarily
            insured by the United States Government or any agency or
            instrumentality thereof, or by any state or municipality, and that
            such investments do not necessarily earn a fixed rate of return.

      (iii) All income earned on the Escrow Fund, after payment of expenses
            incurred in connection therewith, shall be reported as income to the
            party that eventually receives the Escrow Fund. The Purchaser and
            the Beneficial Owners each agree to provide the Escrow Agent with a
            certified tax identification number by signing and returning a Form
            W-9 to the Escrow Agent prior to the date on which interest or other
            income is first earned by the Escrow Fund. The Purchaser and the
            Beneficial Owners each understands that, in the event tax
            identification numbers are not certified to the Escrow Agent prior
            to any income being earned on the Escrow Fund, the Internal Revenue
            Code may require withholding of a portion of any interest or other
            income earned on the investment of the Escrow Fund.

(e)   PROVISIONS REGARDING ESCROW AGENT.

      (i)   The duties of the Escrow Agent hereunder will be limited to the
            observance of the express provisions of this Agreement. The Escrow
            Agent's duties shall be determined only with reference to this
            Agreement and applicable laws and it shall have no implied duties.

      (ii)  The Escrow Agent shall not be bound by, deemed to have knowledge of,
            or have any obligation to make inquiry into or consider, any term or
            provision of any agreement between the Purchaser, the Sellers and/or
            any other third party which may be referred to herein or as to which
            the escrow relationship created by this Agreement relates, including
            but not limited to this Agreement. The Escrow Agent will not be
            subject to, or be obliged to recognize, any other agreement

            between the parties hereto or directions or instructions not
            specifically set forth or as provided for herein, other than any
            joint written instructions of the Purchaser and the Beneficial
            Owners.

      (iii) The Escrow Agent will not make any payment or disbursement from or
            out of the Escrow Fund that is not expressly authorized pursuant to
            this Agreement. The Escrow Agent may rely upon and act upon any
            written notice, certificate, statement, request, advice,
            instruction, direction or other instrument or signature received by
            it that it believes in good faith to be genuine and to have been
            delivered pursuant to the provisions of this Agreement, and may
            assume that any person purporting to give the Escrow Agent any of
            the foregoing in accordance with the provisions hereof, or in
            connection with either this Agreement or the Escrow Agent's duties
            hereunder, has been duly authorized to do so. The Escrow Agent will
            not be liable for any error of judgment, mistake of fact or law, any
            act or omission, or any step taken or not taken, except as a result
            of its willful misconduct or gross negligence. This provision shall
            survive resignation or removal of the Escrow Agent and the
            termination of this Escrow Agreement.

      (iv)  The Escrow Agent may consult with and obtain advice from legal
            counsel in the event of any dispute or question as to the
            construction of any of the provisions hereof or the Escrow Agent's
            duties hereunder, and the Escrow Agent shall incur no liability and
            shall be fully protected in acting in good faith in accordance with
            the advice of its legal counsel. The Escrow Agent shall not be
            responsible in any manner whatsoever for any failure or inability of
            any of the other parties hereto, or anyone else, to perform or
            comply with any provisions of this Agreement.

      (v)   If at any time the Escrow Agent shall be in doubt as to the party or
            parties entitled to receive any or all of the Escrow Fund, or the
            Escrow Agent shall receive any certificate, statement, request,
            notice, advice, instruction, direction or other agreement or
            instrument from any other party with respect to the Escrow Fund
            which, in the Escrow Agent's reasonable and good faith opinion, is
            in conflict with any of the provisions of this Agreement, or shall
            be advised that a dispute has arisen with respect to the Escrow Fund
            or any part thereof, or if for any other reason it shall be unable
            in good faith to determine the party or parties entitled to receive
            a disbursement from the Escrow Fund, or be uncertain as to its
            duties or rights hereunder, the Escrow Agent shall be entitled,
            without liability to any person, to refrain from taking any action
            other than to keep safely the Escrow Fund until the Escrow Agent
            shall be directed otherwise in accordance with Section (c) of this
            Exhibit 1.3(c), whereupon the Escrow Agent shall make such
            disbursement in accordance with such joint written instructions or
            in accordance with a final, non-appealable order of a court of
            competent jurisdiction as to the disposition of the Escrow Fund. The
            Escrow Agent shall be under no duty to institute or defend any legal
            proceedings, although the Escrow Agent may, in its discretion and at
            the expense of Sellers and Purchaser, institute or defend such
            proceedings. The parties hereto authorize the Escrow Agent, if the
            Escrow Agent is threatened with litigation or is sued, to interplead
            all interested parties in any court of competent jurisdiction and to
            deposit the Escrow Fund with the clerk of that court. In the event
            of any dispute hereunder, the Escrow Agent shall be entitled to
            petition a court of competent jurisdiction and shall perform any
            acts ordered by such court. The Escrow Agent's fees and costs for
            such litigation shall be reimbursed as incurred as provided in
            Section (f) of this Exhibit 1.3(c) below.

      (vi)  In no event will the Escrow Agent be liable for any lost profits or
            other indirect, special, incidental or consequential damages which
            the parties may incur or experience by reason of having entered into
            or relied on this Agreement or arising out of or in connection with
            the Escrow Agent's services, even if the Escrow Agent was advised or
            otherwise made aware of the possibility of such damages; nor shall
            the Escrow Agent be liable for acts of God, breakdowns or
            malfunctions of machines or computers, interruptions or malfunctions
            of communications or power supplies, actions of public authorities,
            or any other similar cause or catastrophe, in each case beyond the
            Escrow Agent's reasonable control.


      (vii) The Escrow Agent makes no representations as to the validity, value,
            genuineness, or the collectibility of any security or other document
            or instrument held by or delivered to the Escrow Agent by or on
            behalf of the parties hereto.


(f)   INDEMNIFICATION OF ESCROW AGENT. The Purchaser and the Beneficial Owners
      will, jointly and severally, indemnify and hold the Escrow Agent harmless
      from and against any and all claims, suits, actions, proceedings,
      investigations, judgments, deficiencies, damages, settlements, liabilities
      and expenses (including reasonable legal fees and expenses of one attorney
      chosen by the Escrow Agent) as and when incurred, arising out of or based
      upon any act, omission, alleged act or alleged omission by the Escrow
      Agent or any other cause, in any case in connection with the performance
      or non-performance by the Escrow Agent of or any of the Escrow Agent's
      duties under this Agreement, except as a result of the Escrow Agent's
      willful misconduct or gross negligence. The foregoing indemnification
      shall survive the resignation or removal of the Escrow Agent and the
      termination of this Agreement.

(g)   FEES AND EXPENSES OF THE ESCROW AGENT. The Escrow Agent will be entitled
      to an initial one-time fee of $5,200 and its reasonable counsel fees, as
      incurred. As between the Purchaser and the Sellers, the fees and expenses
      to be paid to the Escrow Agent shall be paid first from interest that
      accrues on the Escrow Fund and, thereafter, borne 50% by Purchaser and 50%
      by the Sellers. The parties agree that if, ten (10) days following the
      submission of a bill for reasonable fees and expenses by the Escrow Agent
      to the Purchaser and the Beneficial Owners, either the Purchaser or the
      Beneficial Owners, or both, have not paid the amounts then owed by such
      party, the Escrow Agent shall be entitled to pay itself for such amounts
      owed to the Escrow Agent out of the amounts held in the Escrow Fund and
      the parties hereby grant to the Escrow Agent a first priority security
      interest in the Escrow Fund to secure all obligations owed by them to the
      Escrow Agent under this Agreement. If the Escrow Agent pays itself out of
      the Escrow Fund, the party that didn't pay its portion of the bill will be
      obligated to restore such amounts to the Escrow Fund.

(h)   RESIGNATION AND REMOVAL OF ESCROW AGENT

      (i)   Resignation of Escrow Agent. The Escrow Agent may resign from its
            duties hereunder by giving each of the parties hereto not less than
            30 days' prior written notice of the effective date of such
            resignation (which effective date shall be at least 30 days after
            the date such notice is given). In the event of such resignation,
            Purchaser and Beneficial Owners agree that they will jointly appoint
            a successor escrow agent within 30 days of notice of such
            resignation. After such date, the Escrow Agent shall have no further
            obligation hereunder except to hold the Escrow Fund as depository,
            and not as Escrow Agent, until a successor escrow agent is
            appointed. The Escrow Agent shall refrain from taking any action
            until it shall receive joint written instructions from the Purchaser
            and the

            Beneficial Owners designating the successor escrow agent. The Escrow
            Agent shall deliver all of the Escrow Fund to such successor escrow
            agent in accordance with such instructions and upon receipt of the
            Escrow Fund, the successor escrow agent shall be bound by all of the
            provisions hereof.


      (ii)  REMOVAL OF ESCROW AGENT. The Purchaser and the Beneficial Owners
            acting together shall have the right to terminate the appointment of
            the Escrow Agent, specifying the date upon which such termination
            shall take effect. After such date, the Escrow Agent shall have no
            further obligation hereunder except to hold the Escrow Fund as
            depository. The Purchaser and the Beneficial Owners agree that they
            will jointly appoint a successor escrow agent effective with the
            termination of the appointment of the Escrow Agent hereunder. The
            Escrow Agent shall refrain from taking any action until it shall
            receive joint written instructions from the Purchaser and the
            Beneficial Owners designating the successor Escrow Agent. The Escrow
            Agent shall deliver all of the Escrow Fund to such successor Escrow
            Agent in accordance with such instructions and upon receipt of the
            Escrow Fund, the successor Escrow Agent shall be bound by all of the
            provisions hereof.

                                 EXHIBIT 6.2(j)

                     FORM OF OPERATIONS TRANSFER AGREEMENT


                               [See Doc # 789,941]

                                                                  EXHIBIT 6.2(j)


                         OPERATIONS TRANSFER AGREEMENT

      [There will be a separate agreement for each facility and we will tailor
the bracketed language as appropriate.]

      THIS AGREEMENT is made and entered into by and between [Holmesdale Care
Center, Inc.  Carmel Hills Living Center, Inc.  Liberty Terrace Nursing,
LLC], a Missouri [corporation  limited liability company] ("OPERATOR") and
[Holmesdale Healthcare and Rehabilitation Center, LLC  Carmel Hills
Healthcare and Rehabilitation Center, LLC  Liberty Terrace Healthcare and
Rehabilitation Center, LLC], a Delaware limited liability company
("TRANSFEREE").

                                    RECITALS

         A. Operator is the licensed operator of that [residential
living/skilled nursing] facility commonly known as the [Holmesdale Care Center
 Carmel Hills Living Center  Liberty Terrace Care Center] (the
"FACILITY").

         B. [Holmesdale Development, LLC  Carmel Hills Property, LLC 
Liberty Terrace Care Center, Inc.] (the "OWNER") is the owner of the Facility.

         C. Pursuant to an Asset Purchase Agreement, dated as of January 31,
2006, by and among Transferee, Operator and the other parties named therein (the
"ASSET PURCHASE AGREEMENT"), Operator has agreed to transfer operational
responsibility for the Facility to Transferee.

         D. Operator and Transferee are desirous of documenting the terms and
conditions under which said transfer will occur.

         E. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Asset Purchase Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants of the parties set forth herein, IT IS HEREBY AGREED AS
FOLLOWS:

                                    AGREEMENT

      1. TERM. This Agreement shall terminate ninety (90) days after the Closing
Date ("EXPIRATION DATE") unless continuing obligations are otherwise
specifically set forth herein below.

      2. TRANSFER OF PATIENT TRUST FUNDS.

         2.1. On the Closing Date, Operator shall provide to Transferee a true,
correct and complete accounting (properly reconciled) of any patient trust funds
and an inventory of all residents' property held by Operator on the Closing Date
for residents at the Facility (collectively

the "PATIENT TRUST FUNDS"). Operator shall provide notice to residents and their
responsible parties or agents of the transfer of operations and the transfer of
the Patient Trust Funds.

         2.2. Operator hereby agrees to transfer such Patient Trust Funds and
property to Transferee upon Closing. Transferee hereby agrees that it will
accept such Patient Trust Funds in trust for the residents, in accordance with
applicable statutory and regulatory requirements.

         2.3. Operator will indemnify, defend and hold Transferee harmless from
all liabilities, claims and demands, including reasonable attorney's fees, in
the event the amount of the Patient Trust Funds, if any, transferred to
Transferee did not represent the full amount of the Patient Trust Funds shown to
have been delivered to Operator as custodian or with respect to any Patient
Trust Funds delivered, or claimed to have been delivered, to Operator, but which
were not delivered by Operator to Transferee, or for claims which arise from
actions or omissions of Operator with respect to the Patient Trust Funds prior
to the Closing Date.

         2.4. Transferee will indemnify, defend and hold Operator harmless from
all liabilities, claims and demands, including reasonable attorneys' fees, in
the event a claim is made against Operator by a patient for his/her Patient
Trust Funds where such funds were transferred to Transferee pursuant to the
terms hereof.

         2.5. The parties agree to execute any documents required by State
licensing authorities to reflect this transfer.

      3.  COST REPORTS AND CLAIMS.

         3.1. Operator shall timely prepare and file with the appropriate
Missouri state agencies and Medicare agencies and/or fiscal intermediaries all
terminating and other cost reports (or claims for reimbursement for items and
services) required by law to be filed under the Medicare or Medicaid or other
third party payer programs for periods ending prior to the Closing Date, or
required as a result of the consummation of the transaction described herein.
Operator will provide the appropriate agencies and/or fiscal intermediaries with
any information needed to support claims for reimbursement made by Operator
either in said final cost report or in any cost reports filed for prior cost
reporting periods, it being specifically understood and agreed that the intent
and purpose of this provision is to ensure that the reimbursement paid to
Transferee after it becomes the licensed operator of the Facility is not reduced
or offset in any manner as a result of Operator's failure to accurately and
timely file such final cost reports, claims or such supporting documentation
with respect to any past reimbursement claims, including, but not limited to,
those included in the final cost reports. Operator shall promptly provide
Transferee with copies of such reports or claims and supporting documentation.
Transferee will provide Operator with any information which the Transferee has
in its possession that Operator reasonably requests in order to prepare these
reports or claims. Transferee will otherwise reasonably cooperate with the
Operator to assist it in the preparation of such reports or claims.

         3.2. In the event the federal or state agencies and/or fiscal
intermediaries making payments to Operator for services performed prior to the
Closing Date make any claim for reimbursement of overpayment occurring for any
such period, then Operator agrees to


                                       2

immediately remit the overpaid amount to the overpaying agency as directed
except where such claim is disputed in good faith. If any such sum is deducted
from Transferee's payments, then Operator agrees to pay said amount directly to
Transferee within five (5) business days of notice even if Operator objects to
the finding of overpayment; provided, however, that if Operator prevails in its
objection, Transferee shall reimburse Operator within five (5) business days of
notice thereof by Operator.

         3.3. If, on or after the Closing Date, Transferee receives payment from
any federal or state agency and/or fiscal intermediaries which payment
represents reimbursement with respect to payment for services rendered by
Operator prior to the Closing Date, then Transferee shall promptly (within five
(5) business days) forward such payments to Operator pursuant to Section 5
hereof; provided, however, that Transferee shall have the right to offset
against any such payments, any amounts which are due and owing to it from
Operator or any amounts deducted from its Missouri Medicaid Program or Medicare
payments as a result of a default by Operator in its obligations under this
Section 3. Within ten (10) days after the end of each month, Transferee shall
provide Operator with a detailed accounting of all payments received during such
month, any offset claimed by Transferee against any such payments, and the net
amount of any payments to Transferee.

         3.4. Any payments received by Operator on or after the Closing Date
from any federal or state agency which represents reimbursement for services
rendered by Transferee on or after the Closing Date shall be promptly remitted
by Operator to Transferee; provided, however, that Operator shall have the right
to offset against any such payments, any amounts which are due and owing to it
from Transferee. Operator and Transferee agree to cooperate in providing the
State of Missouri and the Facility's designated fiscal intermediary with an
appropriate statement concerning Missouri Division of Medical Services and
federal liabilities, respectively, and the respective obligations of the parties
hereto if and to the extent required by Missouri law.

      4.  EMPLOYEES.

         4.1. Twenty days prior to the Closing Date, Operator shall deliver to
Transferee (A) a schedule (the "EMPLOYEE SCHEDULE") which reflects among other
things the following: (i) the name of all employees of the Facility as of the
date thereof, (ii) their positions, (iii) rates of pay, (iv) dates of service
and (B) a schedule of employee benefits.

         4.2. Upon reasonable notice to Operator, Transferee shall have access
to the Facility during regular business hours prior to the Closing Date to meet
with and interview employees and Operator agrees to cooperate with Transferee in
this process with respect to availability of employees and space suitable for
interviews. Transferee reserves the right not to hire any individual employee of
Operator for any lawful reason whatsoever. Nothing herein shall be deemed to
create or grant to any such employees third party beneficiary rights or claims
of any kind or nature. Transferee shall have no liability whatsoever with
respect to any matter relating to the employment of the Operator's employees
prior to the Closing Date. Transferee intends to hire substantially all, but in
any event no less than two-thirds, of the employees named on the Employee
Schedule.


                                       3

         4.3. No less than fourteen (14) days prior to the Closing Date,
Operator shall provide appropriate notice to all its employees of the pending
change in ownership of the facility, which shall include a notice of termination
effective on the Closing Date and, if requested by Purchaser, information
regarding how the employee should submit an application for employment with
Transferee.

         4.4. Operator will satisfy all employees with respect to wages, and all
benefits accrued to the employees without respect to whether the employee is
hired by Transferee, and make any necessary payments to employees accordingly
and as required by law through the Closing Date, including without limitation
all payments required to be made in respect of Accrued PTO in accordance with
the terms of the Asset Purchase Agreement. Operator agrees to indemnify, defend
and hold harmless the Transferee with respect to any Employee claims for acts or
omissions of Operator or any other employee claims of any nature which relate to
the period prior to the Closing Date. Transferee agrees to indemnify, defend and
hold harmless the Operator with respect to any Employee claims for acts or
omissions of Transferee or any other employee claims of any nature which relate
to the period after the Closing Date.

         4.5. Operator shall offer and provide, as appropriate, group health
plan continuation coverage pursuant to the requirements of Section 601, et seq.
of ERISA and Section 498B of the Internal Revenue Code ("COBRA") to all of the
employees of the Facility to whom it is required to offer the same under
applicable law. Operator acknowledges and agrees that Transferee is not assuming
any of Operator's obligations to its employees under COBRA.

      5.  ACCOUNTS RECEIVABLE.

         5.1. Operator shall retain its right, title and interest in and to all
unpaid accounts receivable with respect to the Facility which relate to the
period prior to the Closing Date, including, but not limited to, any accounts
receivable arising from rate adjustments which relate to the period prior to the
Closing Date even if such adjustments occur on or after the Closing Date and
Operator shall remain liable for any overpayments made to Operator prior to the
Closing Date for which payment is due to the Missouri Medicaid Program or any
other third party payor on or after the Closing Date.

         5.2. Payments received by Transferee on or after the Closing Date from
third party payors, such as the Missouri Medicaid Program, Medicare, HMO and VA,
shall be handled as follows:

            (a) If such payments either specifically indicate on the
accompanying remittance advice, or if the parties agree, that they relate to the
period prior to the Closing Date, they shall be forwarded to Operator by
Transferee, along with the applicable remittance advice.

            (b) If such payments indicate on the accompanying remittance advice,
or if the parties agree, that they relate to the period on or after the Closing
Date, they shall be retained by Transferee.

            (c) If such payments indicated on the accompanying remittance
advice, or if the parties agree, that they relate to periods both prior to and
on or after the Closing


                                       4

Date, the portion thereof which relates to the period on or after the Closing
Date shall be retained by Transferee and the balance shall be remitted to
Operator.

         5.3. Any payments received by Transferee or Operator during the first
thirty days after the Closing Date from or on behalf of private pay residents or
residents with outstanding balances as of the Closing Date which fail to
designate the period to which they relate, will first be applied by Transferee
to reduce the patient's pre-Closing Date balances which Transferee has received
notice of in advance of the Closing Date, with any excess applied to reduce any
balances due for services rendered by Transferee on or after the Closing Date.
Thereafter all non-designated payments will first be applied to any balances for
the period on or after the Closing Date, with the excess, if any, applied to the
extent of any balances due for services rendered by Operator prior to the
Closing Date.

         5.4. Nothing herein shall be deemed to limit in any way Transferee's or
Operator's rights and remedies to recover accounts receivable due and owing
Transferee or Operator under the terms of this Agreement.

         5.5. In the event the parties mutually determine that any payment
hereunder was misapplied by the parties, the party which erroneously received
said payment shall remit the same to the other within ten (10) days after said
determination is made.

         5.6. Each party shall have the right to inspect all cash receipt
records of the other party in order to confirm that party's compliance with the
obligations imposed on it under this Section 5.

         5.7. Transferee will provide billing services for Operator, which may
include any or all of the following:

            (a) Create a General Ledger tie-in to the Accounts Receivable system
for both Operator and Transferee General Ledgers.

            (b) Bill the Missouri Medicaid Program, Medicare, and other third
party payers, private pay or resident claims, and deductibles and coinsurance as
appropriate for any unbilled services rendered prior to or on the Closing Date.

            (c) When funds arrive, provide a reconciliation as to what is owed
to Operator based upon actual days of patient or resident service, and a copy of
the Missouri Medicaid Program Remittance Advice and supporting documentation
within five days of receipt.

            (d) Wire transfer or issue a cashiers check to Operator within 24
hours of receipt of a payment net of any fees earned under this Section 5.

            (e) Provide an updated consolidated aging report by the twentieth of
each month broken down by patient and payor type.

            (f) Provide a general ledger summary of revenues by the twentieth of
each month broken down by payor type.


                                       5

The foregoing services will be provided at no cost to Operator commencing on the
Closing Date and continuing until the Expiration Date; provided, however, that
during such time, Operator shall provide assistance in connection with the
transition of the billing, accounting and collection activities. If Operator
elects to have Transferee continue to provide these services after the
Expiration Date, the parties will negotiate a mutually acceptable arrangement.

         5.8. To the extent permitted by law, Operator shall allow Transferee
the right to bill Medicare under Operator's provider numbers for the period
commencing on the Closing Date until all of Transferee's certifications and
provider enrollments are final and Transferee is readily able to bill Medicare
directly under Transferee's own provider numbers.

       6.  PRORATIONS.

         6.1. Revenues and expenses pertaining to Assumed Operating Contracts
(as defined in Section 8), utility charges for the billing period in which the
Closing Date occurs, real and personal property taxes and other related items of
revenue or expense attributable to the Facility shall generally be prorated
between Operator and Transferee as of the Closing Date.

         6.2. All such prorations shall be made on the basis of actual days
elapsed in the relevant accounting or revenue period and shall be based on the
most recent information available to Operator. Utility charges which are not
metered and read on the Closing Date shall be estimated based on prior charges,
and shall be re-prorated upon receipt of statements therefor.

         6.3. All amounts owing from one party hereto to the other party hereto
that require adjustment after the Closing Date shall be settled within thirty
(30) days after the expiration of the term of this Agreement or, in the event
the information necessary for such adjustment is not available within said
thirty (30) day period, then as soon thereafter as practicable.

      7. ACCESS TO RECORDS.

         7.1. On the Closing Date Operator shall deliver to Transferee all of
the records of the Facility, including, but not limited to, patient or resident
medical and financial records and non-confidential employee records; provided,
however, that nothing herein shall be construed as precluding Operator from
removing from the Facility on the Closing Date the financial records which
relate to its operations at the Facility and/or to its overall corporate
operations; and provided, further, that Operator shall give Transferee access to
any information in any such removed records as Transferee may demonstrate to the
reasonable satisfaction of Operator is necessary for the efficient operation of
the Facility by Transferee.

         7.2. Subsequent to the Closing Date, Transferee shall allow Operator
and its agents and representatives to have reasonable access to (upon reasonable
prior notice and during normal business hours), and to make copies of, the books
and records and supporting material of the Facility relating to the period prior
to the Closing Date, to the extent reasonably necessary to enable Operator to
investigate and defend malpractice, employee or other claims, to file or defend
cost reports and tax returns and to verify accounts receivable collections due
Operator.


                                       6

         7.3. Operator shall be entitled to remove the originals of any records
delivered to Transferee, for purposes of litigation involving a patient or
employee to whom such record relates, if an officer of or counsel for Operator
certified that such original must be produced in order to comply with applicable
law or the order of a court of competent jurisdiction in connection with such
litigation. Any record so removed shall promptly be returned to Transferee
following its use.

         7.4. Transferee agrees to maintain such books, records and other
material comprising records of the Facility's operations prior to the Closing
Date that have been received by Transferee from Operator or otherwise,
including, but not limited to, patient or resident records and records of
patient funds, to the extent required by law, but in no event less than three
(3) years, and shall allow Operator a reasonable opportunity to remove such
documents, at Operator's expense, at such time after such record retention
period as may be required by law has expired or as Transferee shall decide to
dispose of such documents.

         8. ASSUMED OPERATING CONTRACTS. Effective as of the Closing Date,
Operator shall assign, and Transferee shall assume and agree to be bound by all
of the terms and conditions of, the operating contracts which are described more
fully in Exhibit A hereto (the "ASSUMED OPERATING CONTRACTS"). Nothing herein
shall be construed as imposing any liability on Transferee with respect to any
obligation under (A) the Assumed Operating Contracts which relate to the period
prior to the Closing Date even if the same do not arise until after the Closing
Date, it being specifically understood and agreed that Transferee's liability
shall be limited to its acts and omissions thereunder from and after the Closing
Date or (B) the operating contracts which Transferee has not agreed to assume as
of the Closing Date (the "EXCLUDED OPERATING CONTRACTS"), including without
limitation those set forth on Exhibit B. Operator shall cooperate with
Transferee in obtaining any third party consent required for the valid transfer
of the Assumed Operating Contracts as contemplated by this Agreement.

      9.  INDEMNIFICATION

            (a) OPERATOR INDEMNITY. Operator agrees to indemnify, defend and
hold harmless Transferee against any and all costs, liability and expenses,
including reasonable attorneys' fees, which it may incur as a result of (i) a
breach by Operator of its obligations under this Agreement, (ii) the acts or
omissions of the Operator under the Assumed Operating Contracts prior to the
Closing Date and any amounts owed with respect to such period, (iii) the acts or
omissions of the Operator under any terminated contract regardless of whether it
relates to the period prior to or after the Closing Date or (iv) the ownership
or operation of any Facility prior to the Closing Date. Notwithstanding the
foregoing, Operator shall be subject to the same rights and obligations with
respect to indemnification as apply to Owner under Article 8 of the Asset
Purchase Agreement.

            (b) OWNER AND TRANSFEREE INDEMNITY. The indemnification obligations
of Transferee and Owner shall be satisfied under the terms set forth in the
Asset Purchase Agreement.

      10. GENERAL PROVISIONS.


                                       7

         10.1. FURTHER ASSURANCES. Each of the parties hereto agrees to execute
and deliver any and all further agreements, documents or instruments necessary
to effectuate this Agreement and the transactions referred to herein or
contemplated hereby or reasonably requested by the other party to perfect or
evidence their rights hereunder, including but not limited to Operator's
surrender of its license, assignment or transfer of its provider agreements to
Transferee, to the extent permissible, or other documents as may be required to
effect the transfer of the license and certification to Transferee.

         10.2. NOTICES. All notices to be given by either party to this
Agreement to the other party hereto shall be in writing, and shall be (a) given
in person, (b) deposited in the United States mail, certified or registered,
postage prepaid, return receipt requested, or (c) sent by national overnight
courier service, each addressed as follows:

             (a)  If to Operator:

                  [Holmesdale Care Center, Inc.  Carmel Hills Living Center,
                  Inc.  Liberty Terrace Nursing, LLC]
                  9101 Buena Vista
                  Prairie Village, Kansas 66207
                  Attention: M. Terence Reardon

             (b)  If to Transferee:

                  Skilled Healthcare Group, Inc.
                  27442 Portola Parkway, Suite 200
                  Foothill Ranch, CA 92610
                  Attention: Roland Rapp, Esq.

      Any such notice personally delivered shall be deemed delivered when
actually received, any such notice deposited in the United States mail,
registered or certified, return receipt requested, with all postage prepaid,
shall be deemed to have been given on the earlier of the date received or the
date when delivery is first refused, and any notice deposited with an overnight
courier service for delivery shall be deemed delivered on the business day
following such deposit. Any party to whom notices are to be sent pursuant to
this Agreement may from time to time change its address for further
communications thereunder by giving notice in the manner prescribed herein to
all other parties hereto.

         10.3. PAYMENT OF EXPENSES. Each party hereto shall bear its own legal,
accounting and other expenses incurred in connection with the preparation and
negotiation of this Agreement and the consummation of the transactions
contemplated hereby, whether or not the transactions are consummated.

         10.4. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement, together
with the other agreements referred to herein, constitutes the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and preliminary agreements. This
Agreement may not be modified or amended except in writing signed by the parties
hereto. No waiver of any term, provision or condition of this Agreement in



                                       8

any one or more instances, shall be deemed to be or be construed as a further or
continuing waiver of any such term, provision, condition or rights granted
hereunder.

         10.5. ASSIGNMENT. Neither this Agreement nor the rights, duties or
obligations arising hereunder shall be assignable or delegable by either party
hereto without the express prior written consent of the other party hereto;
provided, however, Transferee may assign its rights hereunder to one or more
Affiliates without the prior written consent of Operator.

         10.6. JOINT VENTURE; THIRD PARTY BENEFICIARIES. Nothing contained
herein shall be construed as forming a joint venture or partnership between the
parties hereto with respect to the subject matter hereof. The parties hereto do
not intend that any third party shall have any rights under this Agreement.

         10.7. CAPTIONS. The section headings contained herein are for
convenience only and shall not be considered or referred to in resolving
questions of interpretation.

         10.8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and all such counterparts taken together shall constitute a single
original Agreement.

         10.9. GOVERNING LAW. This Agreement shall be governed in accordance
with the laws of the State of Missouri.

         10.10. ATTORNEY FEES. In the event that a lawsuit is commenced to
enforce a provision of this agreement by either party against the other the
prevailing party in such action shall be entitled to reasonable attorney fees
and costs associated with bringing the action.

         10.11. SEVERABILITY. This Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
hereof shall be prohibited or invalid under any such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.


                                       9

IN WITNESS WHEREOF, the parties hereby execute
this Agreement as of the day and year first set forth above.


"OPERATOR"                             "TRANSFEREE"


By:                                    By:
      ------------------------               --------------------
Name:                                  Name:
      ------------------------               --------------------
Its:                                   Its:
      ------------------------               --------------------

                                    EXHIBIT A

                          ASSUMED OPERATING CONTRACTS

                                       2

                                    EXHIBIT B

                          EXCLUDED OPERATING CONTRACTS


                                       3

                                 EXHIBIT 6.2(R)

                        FORM OF MEDICAID ESCROW AGREEMENT



                                                                  EXHIBIT 6.2(R)

                               MEDICAID AGREEMENT

      This Agreement is made on this ____ day of ______________, ______, by and
between [Holmesdale Care Center, Inc.  Carmel Hills Living Center, Inc.
 Liberty Terrace Nursing, LLC], a Missouri [corporation  limited
liability company] (the "Prior Operator"), [Holmesdale Healthcare and
Rehabilitation Center, LLC  Carmel Hills Healthcare and Rehabilitation
Center, LLC  Liberty Terrace Healthcare and Rehabilitation Center, LLC], a
Delaware limited liability company (the "New Operator"), and Chicago Title
Insurance Company ("Escrow Agent"). This Agreement is based upon the following:

      A.    Missouri Department of Social Services is an agency of the State of
Missouri in which the Division of Medical Services ("DMS") is contained. DMS has
authority to make reimbursement payments to nursing home facilities
participating in the Title XIX (Medicaid) program in the State of Missouri.

      B.    Prior Operator operates a long-term care facility (the "Facility")
located at:

                              --------------------

                              --------------------

                              --------------------

      C.    The Facility is certified by the Missouri Department of Health and
Senior Services ("DHSS") to participate in the Title XVIII (Medicare) and Title
XIX (Medicaid) reimbursement program.

      D.    Prior Operator and the New Operator have entered into an agreement
whereby Prior Operator and New Operator contemplate that as of
____________________, there will be a change of operator of the Facility so that
the New Operator will become the licensee and operator of the Facility effective
on that date.

      E.    As a result of the change in operator of the Facility, the parties
acknowledge that the Prior Operator is required by 13 CSR 70-10.015(10)(E) to
file a Medicaid cost report for the period ending on the effective date of the
change in ownership or control of the Facility not later than the first day of
the sixth month after the effective date of the change of control or ownership
or on such other date as may be provided by any amendment to said regulation
(the "Cost Report Deadline").

      F.    Prior Operator and New Operator wish to provide DMS with assurances
satisfactory to DMS that the final cost report of the Prior Operator will be
filed on or before the Cost Report Deadline.

      G.    Prior Operator and New Operator request that Escrow Agent hold the
escrow fund created pursuant to this Agreement.

      Now, therefore, in consideration of the mutual covenants, the parties
agree as follows:



      1.    FILING OF COST REPORT FOR PRIOR OPERATOR. In the event the change of
operator described above shall occur, Prior Operator and New Operator each agree
to take all action which may be necessary or appropriate in order to cause the
cost report of the Prior Operator for the period ending on the date when the
Prior Operator will no longer be the operator of the Facility (the "Effective
Date") to be filed on or before the Cost Report Deadline. Prior Operator agrees
to file its final Medicaid cost report on or before the Cost Report Deadline
with DMS and to deliver to New Operator a copy of its cost report for the period
ended on the Effective Date on or before the Cost Report Deadline.

      2.    WITHHOLDING OF REIMBURSEMENT TO NEW OPERATOR. In the event the
change in operator described above shall occur and if the final cost report of
the Prior Operator shall not be filed on or before the Cost Report Deadline, the
New Operator hereby authorizes DMS to withhold from one or more future Medicaid
reimbursements otherwise payable to the New Operator the aggregate sum of
$30,000. Nothing in this Agreement is intended to modify any other agreement
entered into by and between Prior Operator and New Operator or to relieve either
party of any of its obligations arising under any such other agreement.

      3.    ENROLLMENT BY NEW OPERATOR. The parties acknowledge that in order
for Prior Operator to file its final Medicaid Cost Report it needs to receive a
provider statistical and reimbursement reconciliation ("PS&R") from its fiscal
intermediary and that the PS&R report will not be sent to Prior Operator unless
New Operator shall file documents required to enroll in the Medicare and
Medicaid programs.

      New Operator agrees to use its best efforts in good faith to file all
documents necessary for enrollment of New Operator in the Medicare and Medicaid
programs within ten (10) days after the Effective Date and in any event, no
later than thirty (30) days after the Effective Date.

      If New Operator fails to file all such documents within the stated time
period, this Agreement shall terminate and the Cost Report Deposit (as such term
in defined in Section 4) shall be immediately distributed to Prior Operator.

      4.    MEDICAID COST REPORT DEPOSIT. Prior Operator delivers herewith to
Escrow Agent the sum of Thirty Thousand Dollars ($30,000.00) in the form of a
wire transfer or bank cashier's check (the "Cost Report Deposit"), which sum
shall be held and disbursed by Escrow Agent upon the terms and conditions set
forth hereafter.

      5.    FEE OF ESCROW AGENT. New Operator agrees to pay Escrow Agent's fee
for services hereunder. The total amount of Escrow Agent's fee is $__________
(the "Escrow Fee"). Such fee shall be payable upon execution of this Agreement
by the parties.

      6.    INTEREST ON COST REPORT DEPOSIT AND FEE. Escrow Agent agrees to
place the Cost Report Deposit in an interest-bearing account at an institution
insured by the Federal Deposit Insurance Corporation. All interest earned on the
Cost Report Deposit shall become a part of the Cost Report Deposit. All
distributions shall be distributed in the same manner and on the same terms and
conditions as provided herein for the Cost Report Deposit.

      7.    DISPERSAL OF COST REPORT DEPOSIT. Prior Operator and New Operator
hereby authorize Escrow Agent to deliver the Cost Report Deposit to Prior
Operator promptly in the event

                                       2



New Operator and Prior Operator shall deliver to Escrow Agent a statement (or
statements) that Prior Operator filed its Medicaid Cost Report described in
paragraph 1. Prior Operator and New Operator hereby authorize Escrow Agent to
deliver the Cost Report Deposit to New Operator in the event New Operator and
Prior Operator shall deliver a statement (or statements) to Escrow Agent that
Prior Operator failed to file its Medicaid Cost Report described in paragraph 1
above by the Cost Report Deadline. Prior Operator and New Operator each agree to
execute statements and otherwise cooperate in good faith to effectuate delivery
of the Cost Report Deposit to Prior Operator if Prior Operator shall file its
final Medicaid cost report on or before the Cost Report Deadline and delivery of
the Cost Report Deposit to New Operator in the event Prior Operator shall fail
to file its final Medicaid cost report on or before the Cost Report Deadline.
Nothing in the foregoing shall give New Operator the right to withhold its
signature on the statement to the Escrow Agent for any reason if Prior Operator
has delivered evidence that the Cost Report was filed on or prior to the Cost
Report Deadline.

      8.    DISPUTES.

            (a) In the event a dispute arises about Prior Operator's or New
Operator's entitlement to the Escrow Deposit, including but not limited to the
alleged failure by Prior Operator to file its final Medicaid Cost Report, Escrow
Agent shall give seven days' written notice to Prior Operator and New Operator
by certified mail, return receipt requested, to the addresses listed herein of
Escrow Agent's intent to institute an interpleader action to obtain a judicial
declaration of the parties' entitlement to the Escrow Deposit. In the event
Prior Operator and New Operator fail to provide Escrow Agent with a written
agreement signed by each of them regarding disposition of the Escrow Deposit
within said seven-day period, Prior Operator and New Operator agree that Escrow
Agent shall be entitled to institute an interpleader action in the Circuit Court
of ___________ County, Missouri, and pay the Cost Report Deposit into the court
registry. From the Cost Report Deposit, Prior Operator and New Operator agree
that Escrow Agent shall be entitled to reimbursement for all expenses of
instituting said interpleader action, including but not limited to filing fees,
reasonable attorney's fees, and certified mail cost for the seven-day notice
provided above.

            (b) If Prior Operator and New Operator agree in writing to a
disposition of said Cost Report Deposit, Escrow Agent shall be reimbursed for
the cost of the certified mailings from the escrow sum, Prior Operator and New
Operator to each bear the cost of its respective mailing.

            (c) In the event Escrow Agent institutes an interpleader action as
provided herein, Escrow Agent's obligations hereunder shall immediately
terminate upon the filing of such action, and Escrow Agent shall have no further
obligations hereunder.

      9.    NATURE OF DUTIES OF ESCROW AGENT. Escrow Agent shall not be liable
for any damages, or have any obligations other than the duties prescribed herein
in carrying out or executing the purposes and intent of this Escrow Agreement;
provided, however, that nothing herein contained shall relieve Escrow Agent from
liability arising out of its own willful misconduct or gross negligence. Escrow
Agent's duties and obligations under this Escrow Agreement shall be entirely
administrative and not discretionary. Escrow Agent shall not be liable to any
party hereto or to any third party as a result of any action or omission taken
or made by Escrow Agent in good faith. New Operator and Prior Operator jointly
and severally indemnify Escrow Agent,

                                       3



hold Escrow Agent harmless, and reimburse Escrow Agent from, against and for,
any and all liabilities, costs, fees and expenses (including reasonable
attorneys' fees) Escrow Agent may suffer or incur by reason of its execution and
performance of this Escrow Agreement, except for any such claims arising as a
result of Escrow Agent's willful misconduct, gross negligence, or failure to act
in good faith. In the event any legal questions arise concerning Escrow Agent's
duties and obligations hereunder, Escrow Agent may consult its counsel and rely
without liability upon written opinions given to it by such counsel.

      10.   ACTING UPON WRITTEN NOTICE. Escrow Agent shall be protected in
acting upon any written notice, request, waiver, consent, authorization, or
other paper or document which Escrow Agent, in good faith, believes to be
genuine and what it purports to be.

      11.   NOTICES. All notices and other communications given or made pursuant
to this Agreement must be in writing and will be deemed to have been duly given
or made (i) the second business day after the date of mailing, if delivered by
registered or certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or (iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:

      (i)   If to Prior Operator:

                  --------------------

                  --------------------

                  --------------------

      (ii)  With a copy to:

                  --------------------

                  --------------------

                  --------------------

      (iii) If to New Operator:

                  --------------------

                  --------------------

                  --------------------

      (iv)  With copies to:

                  Skilled Healthcare Group, Inc.
                  27442 Portola Parkway, Suite 200
                  Foothill Ranch, CA 92610
                  Attention: General Counsel

                                       4



                  And

                  Latham & Watkins LLP
                  650 Town Center Drive, 20th Floor
                  Costa Mesa, CA 92626
                  Attention:  Derek D. Dundas
                              David C. Meckler

      (iv)  If to Escrow Agent:

                  Chicago Title Insurance Company

                  --------------------

                  --------------------

      (v)   With a copy to:

                  --------------------

                  --------------------

                  --------------------

      12.   MISCELLANEOUS.

            (a) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision.

            (b) INTERPRETATION. The headings used herein are for convenience
only and do not limit or expand the contents of this Agreement.

            (c) NO WAIVER. No waiver of a breach of any provision of this
Agreement will be construed to be a waiver of any other breach of this
Agreement, whether of a similar or dissimilar nature.

            (d) SURVIVAL. Any provisions of this Agreement creating obligations
extending beyond the term of this Agreement will survive the expiration or
termination of this Agreement, regardless of the reason for such termination.

            (e) AMENDMENTS. Any amendments to this Agreement will be effective
only if in writing and signed by the parties hereto.

            (f) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof.

            (g) ASSIGNMENT. No party may assign its rights or obligations
hereunder without the prior written approval of all other parties.

                                       5



            (h) MISSOURI LAW. This Agreement shall be governed in all respects,
including validity, interpretation, and effect in accordance with the laws of
the State of Missouri.

            (i) NO VIOLATION. Neither party shall be deemed to be in violation
of this Agreement if it is, or reasonably determines it is, prevented from
performing any of its duties or obligations for any reason beyond such party's
control, including, without limitation, flood, storm, strikes, acts of God or
the public enemy, or statute, ordinance, regulation, rule or action of any
applicable governmental entity.

            (j) NO JOINT VENTURE. It is understood and agreed by the parties
that nothing contained in this Agreement shall be construed to create a joint
venture, partnership, association, or other affiliation or like relationship
between the parties, or a relationship of landlord and tenant, it being
specifically agreed that their relationship is and shall remain that of
independent parties to a contractual relationship as set forth in this
Agreement. In no event shall either party be liable for the debts or obligations
of the other of them, except as otherwise specifically provided in this
Agreement.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                        PRIOR OPERATOR:

                                        ----------------------------------------

                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------
                                        Date:
                                             -----------------------------------

                                        NEW OPERATOR:

                                        ----------------------------------------

                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------
                                        Date:
                                             -----------------------------------

                                       6



                                        ESCROW AGENT:

                                        Chicago Title Insurance Company

                                        By:
                                           -------------------------------------
                                        Name: Maggie G. Watson
                                        Title: Senior vice President
                                        Date:
                                             -----------------------------------

                                       7



                                  SCHEDULE 1.2

                                EXCLUDED ASSETS

1.    Deposits, dividends and other assets related to Worker's Compensation
      Insurance maintained by the Companies

2.    Rebates/refunds from vendors for items purchased prior to closing

3.    Automobiles: 1997 Toyota Avalon and 2002 Toyota Sequoia capitalized and
      fully depreciated on the books of Liberty Terrace Nursing

4.    Computer Servers and resident software running on servers including but
      not limited to: Microsoft Server 2000, Microsoft Terminal Server 2000,
      Citrix MetaFrame, Microsoft SQL server 2000, Microsoft Office open
      license, Veritas Backup Exec and McAfee Managed VirusScan. All of which
      are wholly owned by Sunset Healthcare and located at Carmel Hills Living
      Center.

5.    UPC Battery Backup owned wholly by Sunset Healthcare and located at Carmel
      Hills Living Center

6.    Exabyte Tape Backup cartridges and FireKing Media Vault wholly owned by
      Sunset Healthcare and located at Carmel Hills Living Center

7.    Nobilis PC system and resident software including but not limited to:
      Microsoft Windows 2000 server, Microsoft Office 2003, Veritas Backup Exec
      located at Eddie Reardon's office but owned by Holmesdale Care Center.

8.    1- 4 Drawer HON lateral file located at Holmesdale Care Center and wholly
      owned by Sunset Healthcare

9.    MDI On-line advantage SQL databases for each facility

10.   SonicWall TZ-170 VPN/Firewall hardware located at each facility, 3 total
      and owned by Sunset Healthcare

11.   2- External 250 GB Western Digital USB hard drives located at Carmel Hills
      Living Center and owned by Sunset Healthcare



                                 SCHEDULE 1.3(B)

                             PERMITTED ENCUMBRANCES

HOLMESDALE

Liens and encumbrances of record reflected on Title Commitment #020062044,
except for the following which will be released at or before Closing:

      1.    Deed of Trust executed by Holmesdale Development, LLC to Larry K.
            Enkelmann, as Trustee for Security Bank of Kansas City, dated July
            30, 2002 and filed July 31, 2002 under Document No. 2002K0047382, as
            modified and amended January 15, 2004 under Document No.
            2004K0003140

      2.    Assignment of Rents executed by Holmesdale Development, LLC to
            Security Bank of Kansas City, filed July 31, 2002 under Document No.
            2002K0047383

      3.    Deed of Trust executed by Holmesdale Development, LLC to Larry K.
            Enkelmann, as Trustee for Security Bank of Kansas City, dated
            January 21, 2003 and filed January 23, 2003 under Document No.
            2003K0005097

      4.    Assignment of Rents executed by Holmesdale Development, LLC to
            Security Bank of Kansas City, filed January 23, 2003 under Document
            No. 2003K0005098

UCC Financing Statement(s) for each entity filed with the Missouri Secretary of
State in favor of Security Bank of Kansas City (to be released at or before
Closing)

CARMEL HILLS

Liens and encumbrances of record reflected on Title Commitment #020062043,
except for the following which will be released at or before Closing:

      1.    Deed of Trust executed by Carmel Hills Property, LLC to Deanna A.
            Burns, as Trustee for Bank of America, N.A., filed August 23, 2002
            under Document No. 2002I10072470

      2.    Assignment of Leases and Rents executed by Carmel Hills Property,
            LLC to Bank of America filed august 23, 2002 under Document No.
            200210072471

      3.    Financing Statement executed by Carmel Hills Property LLC to Bank of
            America, N.A. filed August 23, 2002 under Document No. 200210072474

      4.    Assignment of Lessee's Interest in Leases and Contract Rights, dated
            August 22, 2002, executed by Carmel Hills Living Center, Inc. to
            Bank of America, N.A. filed August 23, 2002, under Document No.
            200210072473

      5.    Memorandum of Lease, dated August 22, 2002 by Carmel Hills Property
            LLC, to Carmel Hills Living Center, Inc. filed August 23, 2002 under
            Document No. 200210072473

UCC Financing Statement(s) for each entity filed with the Missouri Secretary of
State in favor of Bank of America (to be released at or before Closing)



LIBERTY TERRACE

Liens and encumbrances of record reflected on Title Commitment #020062042,
except for the following which will be released at or before Closing:

      1.    Deed of Trust, Security Agreement and Fixture Filing executed by
            Liberty Terrace Care Center, Inc. to Deanna A. Burns, as Trustee for
            Bank of America, N.A., filed August 23, 2002 under Document No.
            $-30562 in book 3732 at Page 956

      2.    Assignment of Leases and Rents executed by Liberty Terrace Care
            Center, Inc. to Bank of America filed Agust 23, 2002 under Document
            No. R-30563 in Book 3732 at Page 984

      3.    Financing Statement executed by Liberty Terrace Care Center, Inc. to
            Bank of America, N.A. filed August 23, 2002 under Document No.
            R-30566 in Book 3733 at Page 5

      4.    Assignment of Lessee's Interest in Leases and Contract Rights, dated
            August 22, 2002, executed by Liberty Terrace Care Center, Inc. to
            Bank of America, N.A. filed August 23, 2002, under Document No.
            R-30564, in book 3732 at Page 995

      5.    Memorandum of Lease, dated August 22, 2002 by Liberty Terrace Care
            Center, Inc. to Liberty Terrace Nursing LLC filed August 23, 2002
            under Document No. R-30565, in book 3733 at Page 1

UCC Financing Statement(s) for each entity filed with the Missouri Secretary of
State in favor of Bank of America (to be released at or before Closing)

      UCC filing in favor of Invacare Credit Corporation for equipment lease (to
be released at or before Closing)



                                  SCHEDULE 1.5

                           PURCHASE PRICE ALLOCATION



                                 LTCC        CHLC        HCC         TOTAL
- --------------------------------------------------------------------------------
                                                         

LAND                                                                 $   624,750

BUILDINGS                        5,500.000   7,300,000   3,600,000    16,400,000

FFE                                                                      432,500

INTANGIBLES                                                           13,542,750

TOTAL                                                                $31,000,000




                                 SCHEDULE 1.6(B)

                               EXCEPTIONS TO TITLE

"Prior Surveys" includes:

      1.    The survey for Carmel Hills, dated March 27, 2002 by Boundary &
            Construction Surveying, Inc.

      2.    The survey for Holmesdale Center, dated May 21, 2002 by Anderson
            Survey Company.

            -     10 foot sewer easement that runs through the southeast portion
                  of the building.

      3.    The survey for Liberty Terrace, dated October 23, 1997 by George
            Butler Associates, Inc.

            -     15' public utility and drainage easement recorded in Doc No.
                  G80282, Bk 2001, Page 741,
            [Unable to discern whether or not the easement affects the
            property.]



                                 SCHEDULE 1.7(C)

                              ENVIRONMENTAL REPORTS

1.    Underground Storage Tank located on the Holmesdale Care Center facility,
as further described in the Phase I Environmental Reports. Purchaser shall bear
the cost of any soil testing and the cost of filling and closing the underground
storage tank.

2.    Elevator leakage located at the Holmesdale Care Center facility, as
further described in the Phase I Environmental Reports.

Phase I Environmental Reports means those environmental site assessments
conducted by Professional Service Industries, Inc., dated January 24, 2006,
related to each of the Acquired Facilities.



                                  SCHEDULE 2.1

                         COMPANIES AND BENEFICIAL OWNERS



Companies                           Beneficial Owners                  Percentage Interest
- ---------                           -----------------                  -------------------
                                                                 
Holmesdale Care Center, Inc.        M. Terence Reardon and M. Sue      50%
(Operator)                          Reardon as co-trustees of the M.
                                    TERENCE REARDON TRUST
                                    dated 6/26/2003
                                                                       50%

                                    M. Terence Reardon and M. Sue
                                    Reardon as co-trustees of the M.
                                    SUE REARDON TRUST dated
                                    6/26/2003

Holmesdale Development, LLC         Same                               Same
(Building Owner)

Carmel Hills Living Center, Inc.    Same                               Same
(Operator)

Carmel Hills Property, LLC          Same                               Same
(Building Owner)

Liberty Terrace Nursing, LLC        Same                               Same
(Operator)

Liberty Terrace Care Center, Inc.   Same                               Same
(Building Owner)




                                  SCHEDULE 2.2

                                  ORGANIZATION



Companies                                                  State of Organization
- ---------                                                  ---------------------
                                                        
Holmesdale Care Center, Inc.                                     Missouri
(Operator)

Holmesdale Development, LLC.                                     Missouri
(Building Owner)

Carmel Hills Living Center, Inc.                                 Missouri
(Operator)

Carmel Hills Property, LLC                                       Missouri
(Building Owner)

Liberty Terrace Nursing, LLC                                     Missouri
(Operator)

Liberty Terrace Care Center, Inc.                                Missouri
(Building Owner)


                                  SCHEDULE 2.2

                                  SUBSIDIARIES

NONE



                                  SCHEDULE 2.5

                            MATERIAL ADVERSE CHANGES

NONE



                                 SCHEDULE 2.6(a)
                               MATERIAL CONTRACTS

HOLMESDALE CARE CENTER

                                                     
REHAB OUTREACH LLC                        $  343,734       Therapy Provider
Sunset Healthcare                         $  341,436       Management Fee
Holmesdale Development, LLC               $  265,913       Lessor
Great Plains Cmpd Center                  $  165,103       Pharmacy
Sysco Of Kansas City                      $  106,026       Food Vendor
Health Care Facilities Of Missouri        $   84,616       Work Comp Insurance
McKesson Medical-Surgical                 $   65,019       Medical Supplies
LCH Liability Trust                       $   54,996       Insurance Trust
Kansas City Power & Light                 $   42,413       Electric Utility
U S Foodservice (Topeka Division)         $   41,812       Food Vendor
Razorback Plumbing                        $   30,406       Plumbing Vendor-Water Heater Replacement
HMP DME Services                          $   30,360       Medical Equipment/Rentals
Missouri Gas Energy                       $   25,191       Gas Utility
Blackwell Sanders Peper Martin, LLP       $   20,167       Legal
Life Systems, Inc                         $   17,669       Medical Supplies
Massco                                    $   17,306       Hskpg/Laundry/Dietary Supplies
Aflac Corporate Office                    $   15,539       Supplemental Insurance-EE funded
Schindler Elevator Corporation            $   14,586       Elevator Pump Replacement/Maintenance
Carmel Hills                              $   13,442       Shared Services
Roberts Dairy                             $   13,245       Food Vendor
MMS - A Medical Supply Company            $   12,560       Medical Supplies
Heartland Health Laboratories, Inc.       $   11,851       Lab
Direct Supply                             $   11,008       Medical Supplies
Birch Telecom                             $   10,384       Telephone
LARSONALLEN                               $    9,511       Accounting Fees
- ----------------------------------------------------
Grand Total                               $1,764,291
- ----------------------------------------------------





                             SCHEDULE 2.6(a) (CONT.)
                               MATERIAL CONTRACTS

LIBERTY TERRACE CARE CENTER

                                                     
Aegis Therapies                           $  439,788       Therapy Services
Blue Cross Blue Shield                    $  304,416       Health Premiums
Omnicare Pharmacy                         $  250,859       Pharmacy
Sysco                                     $  225,290       Food/Dietary Supplies/Briefs
Health Care Facilities Of Missouri        $  142,508       Work Comp Ins
McKesson Medical-Surgical                 $   82,103       Medical Supplies
Aquila                                    $   69,436       Electric Service
City Of Liberty                           $   50,661       Water/sewer
Missouri Gas Energy                       $   38,960       Gas Service
Massco, Inc                               $   34,057       Hskpg/Laundry/Dietary Supplies Per Diem
AFLAC                                     $   32,977       Supplemental Insurance
Quality Home Siding And Windows           $   30,784       Gutters/soffitts/ceilings
Town And Country Medical                  $   25,265       Equipment Rental
Philadelphia Insurance Company            $   20,872       Property Insurance
Mobile Medical Services, Inc.             $   20,171       X-Ray Services
Larsen Allen                              $   18,652       Tax Services
Roberts Dairy                             $   17,659       Dairy Products
Fortis Benefits DentalCare                $   17,622       Dental Premiums
Lincare                                   $   17,445       Oxygen
Heartland Health Laboratories             $   16,692       Lab Service
John Amick, DO                            $   15,000       Medical Director
Grainger, Inc.                            $   12,100       Maintenance Supplies/Water Heaters
Direct Supply                             $   11,702       Medical Supplies
R J Kool Company                          $   11,301       Laundry Equipment Maintenance/New Washer
SBC Telephone Service                     $   11,253       Telephone Service
Assisted Transportation                   $   11,001       Transportation
Mms                                       $   10,623       Briefs
Life Systems                              $   10,500       Vital Sign Equipment
Providers Plus                            $    9,781       Linens
Pro Cut Lawn Care                         $    9,600       Lawn Mowing/Snow Removal
- ----------------------------------------------------
Grand Total                               $1,969,080
- ----------------------------------------------------





                             SCHEDULE 2.6(a) (CONT.)
                               MATERIAL CONTRACTS

CARMEL HILLS LIVING CENTER

                                                     
AEGIS Therapies                           $1,134,978       Therapy Provider
Carmel Hills Property, LLC                $  946,080       Lessor
Sunset Healthcare                         $  649,239       Management Fee
Sysco                                     $  326,256       Food Vendor
Great Plains CMPD Center                  $  268,236       Pharmacy
Health Care Facilities Of Missouri        $  145,809       Work Comp Insurance Trust
Liberty Terrace Care Center               $  141,531       Health Insurance/Operation Advances
City Of Independence                      $  135,524       Electric/Water/Sewer
Lch Liability Trust                       $  110,004       PG&L Insurance
McKesson-Redline                          $   94,570       Medical Supplies
Control Service Co., Inc                  $   50,208       Emergency Generator/Backup Power
Massco, Inc                               $   45,263       Hskpg/Laundry/Dietary Supplies
AFLAC                                     $   31,414       Supplemental Insurance
Missouri Gas Energy                       $   26,898       Gas Utility
Roberts Dairy Company                     $   24,789       Dairy/Food Vendor
Lincare                                   $   22,152       Oxygen Vendor
Martin Mechanical Corporation             $   21,876       HVAC Vendor
Larsen Allen                              $   19,811       Accounting Firm
Town And Country Medical                  $   19,669       Medical Device Rental
Data Essentials, Inc                      $   17,411       Office Supplies
Philadelphia Insurance Company            $   16,821       Property Insurance
Life Systems                              $   16,208       Medical Supplies
Direct Supply                             $   15,968       Medical Supplies
Providers Plus, Inc                       $   15,262       Linens
MMS                                       $   14,556       Medical Supplies
Blackwell Sanders Peper Martin            $   14,459       Legal
Birch Telecom                             $   12,677       Telephone / Internet
Comcast                                   $   12,190       Cable Vendor
Dr. Johnny Johnson                        $   12,000       Medical Director
Farmer Bros. Co.                          $   11,953       Food Vendor
Medical Resources Of Kansas City, Inc     $   11,797       Oxygen Vendor
Health Technologies, Inc                  $   11,569       Dietary Consultant
Interstate Brands Corporation             $   11,547       Food Vendor
Mobile Medical Services                   $   11,066       Medical Supplies
MDI Technologies                          $   10,390       Software Vendor
Orth, Myra                                $   10,147       Beauty Salon via Resident Trust
Pro Cut Lawn Care                         $    9,900       Lawn Care/Snow Removal





                              SCHEDULE 2.6 (CONT.)
                               MATERIAL CONTRACTS

(b)   See Schedule 2.6(a)

(c)   None

(d)   See Schedule 2.6(a)

(e)   See Schedule 2.22

(f)   None



                                 SCHEDULE 2.7(a)

                                  REAL PROPERTY



COMPANIES                                               INTEREST
- ---------                                               --------
                                                 
Holmesdale Care Center, Inc.                             Lessee
(Operator)

Holmesdale Development, LLC.                        Fee Simple Owner
(Building Owner)

Carmel Hills Living Center, Inc.                         Lessee
(Operator)

Carmel Hills Property, LLC                          Fee Simple Owner
(Building Owner)

Liberty Terrace Nursing, LLC                             Lessee
(Operator)

Liberty Terrace Care Center, Inc.                   Fee Simple Owner
(Building Owner)




                                SCHEDULE 2.10(b)

                          COMPANY INTELLECTUAL PROPERTY

1.    (I)   PATENTS - NONE

      (II)  TRADEMARKS, SERVICE MARKS, LOGOS AND CORPORATE NAMES

            -     Tree Logo for Liberty Terrace Care Center

            -     Grapevines and hills for Carmel Hills Living Center

            -     Corporate Names:

                        Holmesdale Care Center, Inc.
                        Holmesdale Development, LLC
                        Carmel Hills Living Center, Inc.
                        Carmel Hills Property, LLC
                        Liberty Terrace Nursing, LLC
                        Liberty Terrace Care Center, Inc.

      (iii) Copyrights -- None

      (iv)  World Wide Web addresses and domain name registrations

            -     www.carmelhillslivingcenter.com Registered by AssistGuide
                  Expires 4-12-06

            -     www.libertyterrace.com Registered by AssistGuide Expires
                  4-12-06

            -     www.holmesdalecarecenter.com Registerd by AssistGuide Expires
                  4-12-06

            -     www.liberty-terrace.com Registered by Sunset Healthcare
                  Expires 4-17-06

            -     www.holmesdalecc.com Registered by Holmesdale Care Center
                  Expires 5-1-08

            -     www.carmel-hills.com Registered by Sunset Healthcare Expires
                  4-17-06

2.    Licenses and other rights granted to any person by any company - None



                                  SCHEDULE 2.12

                             RESIDENTS AND SUPPLIERS

HOLMESDALE CARE CENTER



Count of Admission Date                                Year
- -----------------------                                ---------------------------------
Referred By                                            2004          2005           2006       Grand Total
- -----------                                            ----          ----           ----       -----------
                                                                                   
Baptist Lutheran Medical Center                       18.73%        25.66%         26.67%         22.03%
Research Medical Center                               20.76%        20.35%         20.00%         20.56%
N/A                                                    6.84%         9.73%         20.00%          8.41%
Truman Medical Center                                  5.06%         6.78%          6.67%          5.87%
St. Luke's Hospital                                    4.05%         6.19%          6.67%          5.07%
Kansas City Care & Rehab                               5.57%         1.77%          0.00%          3.74%
Daughter                                               1.77%         2.95%         13.33%          2.54%
Research Belton Hospital                               2.53%         2.65%          0.00%          2.54%
Family                                                 3.04%         1.47%          6.67%          2.40%
KC CARE AND REHAB                                      4.05%         0.59%          0.00%          2.40%
KC Care & Rehab                                        2.03%         1.77%          0.00%          1.87%
Wife                                                   2.03%         1.47%          0.00%          1.74%
Va Medical Center                                      1.77%         1.77%          0.00%          1.74%
Independence Regional                                  1.27%         2.36%          0.00%          1.74%
Truman Hospital                                        0.51%         2.95%          0.00%          1.60%
Neice                                                  2.28%         0.00%          0.00%          1.20%
Son                                                    1.01%         1.18%          0.00%          1.07%
Truman Mecical Center                                  0.00%         2.06%          0.00%          0.93%
Gardens                                                0.76%         1.18%          0.00%          0.93%
Liberty Terrace                                        1.27%         0.59%          0.00%          0.93%
Relative                                               1.52%         0.29%          0.00%          0.93%
Shawnee Mission Medical Center                         1.52%         0.00%          0.00%          0.80%
Juanita Mcgill                                         1.01%         0.59%          0.00%          0.80%
Home                                                   1.27%         0.00%          0.00%          0.67%
Sister                                                 1.01%         0.29%          0.00%          0.67%
KC CARE                                                1.27%         0.00%          0.00%          0.67%
Baptist Hostpital                                      1.27%         0.00%          0.00%          0.67%
Visiting Nurse Association                             0.00%         1.18%          0.00%          0.53%
KU Medical Center                                      1.01%         0.00%          0.00%          0.53%
Kansas City Rehab                                      0.51%         0.59%          0.00%          0.53%
Husband                                                0.51%         0.29%          0.00%          0.40%
St Joesph                                              0.76%         0.00%          0.00%          0.40%
KC Hospice                                             0.25%         0.59%          0.00%          0.40%
St. Joseph Health Center                               0.25%         0.59%          0.00%          0.40%
Research Hopsptial                                     0.51%         0.00%          0.00%          0.27%
Compass Hospital TX                                    0.00%         0.59%          0.00%          0.27%
St Lukes                                               0.51%         0.00%          0.00%          0.27%
Odyssey                                                0.25%         0.00%          0.00%          0.13%
Mid America Rehab Hospital                             0.25%         0.00%          0.00%          0.13%
Kansas City Cre & Rehab                                0.25%         0.00%          0.00%          0.13%
Independence Regional Health Center                    0.25%         0.00%          0.00%          0.13%
Overland Park Regional Medical Center                  0.25%         0.00%          0.00%          0.13%
Hospital                                               0.00%         0.29%          0.00%          0.13%




                                                                                  
Menorah Medical Center                                 0.00%         0.29%          0.00%          0.13%
St Joseph                                              0.00%         0.29%          0.00%          0.13%
Truman Lakewood                                        0.00%         0.29%          0.00%          0.13%
Tiffany Young                                          0.25%         0.00%          0.00%          0.13%
Truman West                                            0.00%         0.29%          0.00%          0.13%
Grand Total                                          100.00%       100.00%        100.00%        100.00%




CARMEL HILLS LIVING CENTER



Count of AdmissionDate                                    Year
- ----------------------                                    --------------------------------
ReferredBy                                                2004         2005            2006     Grand Total
- ----------                                                ----         ----            ----     -----------
                                                                                    
Independence Regional Hospital                           30.91%       32.99%         20.83%       31.69%
Family                                                   30.00%       26.55%         12.50%       27.73%
Medical Center Of Independence                            6.36%        7.70%         20.83%        7.46%
N/A                                                       4.55%        5.63%          2.08%        5.04%
St Marys                                                  4.42%        4.14%          0.00%        4.15%
Tour                                                      0.00%        2.76%         18.75%        1.95%
Self                                                      1.17%        1.61%          0.00%        1.36%
North Kansas City Hospital                                1.04%        1.26%          6.25%        1.30%
Liberty Terrace                                           1.30%        0.92%          2.08%        1.13%
Baptist Lutheran Medical Center                           0.65%        0.92%          0.00%        0.77%
Research Hospital                                         1.56%        0.00%          0.00%        0.71%
Spectrum/Susan                                            0.52%        0.92%          0.00%        0.71%
Michael Bryant/grandson                                   1.43%        0.00%          2.08%        0.71%
Regency                                                   1.04%        0.34%          0.00%        0.65%
Carondelet Manor                                          0.13%        1.15%          0.00%        0.65%
Royal Terrace                                             0.78%        0.46%          0.00%        0.59%
The Groves                                                0.39%        0.69%          0.00%        0.53%
Dr. Johnson                                               0.91%        0.23%          0.00%        0.53%
Research/Belton/Lou                                       0.52%        0.57%          0.00%        0.53%
Research Psych                                            0.78%        0.34%          0.00%        0.53%
KU Med Center                                             1.04%        0.11%          0.00%        0.53%
Truman Medical Center                                     0.52%        0.46%          0.00%        0.47%
St. Lukes Hospital                                        0.26%        0.69%          0.00%        0.47%
Garden Valley/Dtr Barb                                    0.00%        0.92%          0.00%        0.47%
Menorah/Julie                                             0.26%        0.57%          2.08%        0.47%
Liberty Hospital                                          0.00%        0.92%          0.00%        0.47%
Lee's Summit Hospital                                     0.26%        0.69%          0.00%        0.47%
Calloway Co. Comm Hosp/Joan Brewer/Neice                  0.91%        0.00%          0.00%        0.41%
Truman Lake Manor                                         0.65%        0.11%          0.00%        0.36%
Cass Medical Center                                       0.26%        0.46%          0.00%        0.36%
Dr Johnson                                                0.13%        0.57%          0.00%        0.36%
VA                                                        0.65%        0.00%          0.00%        0.30%
DHHS/Terry                                                0.65%        0.00%          0.00%        0.30%
Heartland Hospice / Lynn, MSW                             0.00%        0.46%          0.00%        0.24%
Dr Ravenscroft                                            0.39%        0.11%          0.00%        0.24%
Independence Manor                                        0.00%        0.46%          0.00%        0.24%
Timothea Richardson                                       0.52%        0.00%          0.00%        0.24%
St Lukes                                                  0.52%        0.00%          0.00%        0.24%
Social Worker                                             0.00%        0.46%          0.00%        0.24%




                                                                                   
Cedars Of Liberty/Scott                                   0.52%        0.00%          0.00%        0.24%
Research Medical Center                                   0.00%        0.46%          0.00%        0.24%
Good Shepherd/Cunningham                                  0.00%        0.34%          0.00%        0.18%
Kimberly Sharier                                          0.39%        0.00%          0.00%        0.18%
Newspaper                                                 0.13%        0.23%          0.00%        0.18%
Clay Co PA/Sara Emighy                                    0.39%        0.00%          0.00%        0.18%
VNA/Judy                                                  0.00%        0.34%          0.00%        0.18%
Two Rivers/Beth Stanton                                   0.00%        0.34%          0.00%        0.18%
St Lukes Home Health Hospice                              0.00%        0.34%          0.00%        0.18%
VNA                                                       0.26%        0.00%          0.00%        0.12%
Jeanette Miller, SW                                       0.00%        0.23%          0.00%        0.12%
Dr. Alcox                                                 0.26%        0.00%          0.00%        0.12%
MARH/Norma                                                0.00%        0.23%          0.00%        0.12%
Providence/Barbara                                        0.26%        0.00%          0.00%        0.12%
St Josephs                                                0.26%        0.00%          0.00%        0.12%
Margarie Ruhl/Transition Office                           0.26%        0.00%          0.00%        0.12%
ITHC/Laurie Hawley                                        0.26%        0.00%          0.00%        0.12%
Co. State Vet. Home At Fitsimons                          0.26%        0.00%          0.00%        0.12%
Heartland Hospice/Lynn                                    0.26%        0.00%          0.00%        0.12%
St. Luke's Northland                                      0.00%        0.00%          4.17%        0.12%
Columbia Regional/JoAnn                                   0.26%        0.00%          0.00%        0.12%
Lyn Ripper, RN / IRHCC                                    0.00%        0.00%          4.17%        0.12%
KC Hospice/Debbie Wilson                                  0.26%        0.00%          0.00%        0.12%
Village Hospice/Harley                                    0.00%        0.23%          0.00%        0.12%
Glennon/Mary                                              0.00%        0.23%          0.00%        0.12%
Southern Care Hospice / Admit From Home                   0.00%        0.00%          2.08%        0.06%
Truman Manor                                              0.00%        0.11%          0.00%        0.06%
VA/Karen                                                  0.00%        0.11%          0.00%        0.06%
Jefferson Healthcare/Cheryl Thornton-Dtr                  0.13%        0.00%          0.00%        0.06%
Town & Country Paper                                      0.13%        0.00%          0.00%        0.06%
Carondelet St Joesph                                      0.13%        0.00%          0.00%        0.06%
Dr. Johnson/dtr                                           0.00%        0.11%          0.00%        0.06%
Case Manger / Chris Dewberry                              0.00%        0.11%          0.00%        0.06%
Lee's Summit Hospital/June                                0.00%        0.00%          2.08%        0.06%
Kansas City Hospice                                       0.00%        0.11%          0.00%        0.06%
DHHS/Joyce Smith                                          0.00%        0.11%          0.00%        0.06%
Henrietta Glossip                                         0.13%        0.00%          0.00%        0.06%
Jackson Co PA, Sherrie Keller                             0.00%        0.11%          0.00%        0.06%
Grand Total                                             100.00%      100.00%        100.00%      100.00%



LIBERTY TERRACE CARE CENTER



Count of Admission Date                                 Year
- -----------------------                                 -------------------------------
                                                                                                   Grand
Referred By                                             2004          2005         2006            Total
- -----------                                             ----          ----         ----            -----
                                                                                      
Liberty Hospital                                       35.58%        42.24%       41.67%          39.38%
Family                                                 11.95%        14.49%       16.67%          13.46%
North Kansas City Hospital                             14.03%         7.14%        4.17%          10.01%
N/A                                                     8.31%         6.12%       12.50%           7.23%
St Lukes                                                6.75%         7.14%        4.17%           6.90%




                                                                                    
St Lukes North                                         3.64%         7.14%        12.50%           5.78%
St Lukes Smithville                                    4.42%         2.86%         4.17%           3.56%
St Marys                                               1.56%         1.02%         0.00%           1.22%
KU Medical Center                                      0.00%         1.63%         0.00%           0.89%
Ray CTY Hosp Walter Peck                               0.26%         1.02%         0.00%           0.67%
Pleasant Valley Grandson Tour                          0.00%         1.22%         0.00%           0.67%
Pat Minor- Sedalia BRHC                                1.56%         0.00%         0.00%           0.67%
Kim Harms- SW - St Johns- St Louis                     1.04%         0.41%         0.00%           0.67%
Hilltop in Arkansas                                    0.78%         0.41%         0.00%           0.56%
Ashton Court                                           1.04%         0.20%         0.00%           0.56%
Tour                                                   0.00%         1.02%         0.00%           0.56%
Care Alternatives Hospice                              0.78%         0.41%         0.00%           0.56%
Dr Bean                                                0.00%         1.02%         0.00%           0.56%
Dr Bartlett                                            0.52%         0.61%         0.00%           0.56%
Aaron Victoria SW                                      1.04%         0.20%         0.00%           0.56%
Hospital                                               1.04%         0.00%         0.00%           0.44%
Research Medical                                       0.26%         0.41%         0.00%           0.33%
Beverly Sue Ryan (res At Woodbine)                     0.52%         0.20%         0.00%           0.33%
Gardens Berry Rd -S. Allen                             0.00%         0.61%         0.00%           0.33%
Independence Regional Hospital                         0.26%         0.41%         0.00%           0.33%
White Oak                                              0.26%         0.41%         0.00%           0.33%
Boone County Hospital                                  0.78%         0.00%         0.00%           0.33%
Internet                                               0.00%         0.41%         0.00%           0.22%
Chip Schmelzer                                         0.26%         0.20%         0.00%           0.22%
St Lukes Hospital                                      0.52%         0.00%         0.00%           0.22%
Truman Hospital                                        0.52%         0.00%         0.00%           0.22%
St Johns                                               0.52%         0.00%         0.00%           0.22%
Carondelet                                             0.00%         0.41%         0.00%           0.22%
Cox Health Care -Jennifer                              0.00%         0.20%         0.00%           0.11%
Carmel Hills                                           0.00%         0.20%         0.00%           0.11%
JoAnn Allison DPOA                                     0.00%         0.00%         4.17%           0.11%
K C V A                                                0.26%         0.00%         0.00%           0.11%
Dr Amick                                               0.26%         0.00%         0.00%           0.11%
Home Health                                            0.26%         0.00%         0.00%           0.11%
Overland Park Regional Med Center STACY                0.00%         0.20%         0.00%           0.11%
Hospice                                                0.26%         0.00%         0.00%           0.11%
Garden Village                                         0.26%         0.00%         0.00%           0.11%
Providence/Barbara                                     0.26%         0.00%         0.00%           0.11%
Good Sheppard Hospice- AMY                             0.26%         0.00%         0.00%           0.11%
- --------------------------------------------------------------------------------------------------------
Grand Total                                          100.00%       100.00%       100.00%         100.00%
- --------------------------------------------------------------------------------------------------------



b)    No Resident purchases more than 5% of services for any company.



                                  SCHEDULE 2.13
                               THIRD-PARTY PAYORS

NONE



                                  SCHEDULE 2.15

                           SELLERS' REQUIRED CONSENTS

None



                                  SCHEDULE 2.16

                         REGULATORY AND LEGAL COMPLIANCE

NONE



                                  SCHEDULE 2.19
                              LICENSES AND PERMITS

SNF LICENSE FROM MISSOURI DEPARTMENT HEALTH AND SENIOR SERVICES

RCF LICENSE FROM MISSOURI DEPARTMENT OF HEALTH AND SENIOR SERVICES

CERTIFICATE OF NEED FOR EACH SNF AND RCF LICENSE

CITY OCCUPATION LICENSE

CITY BUSINESS LICENSE

CLIA LABORATORY CERTIFICATION

CERTIFICATE OF PARTICIPATION IN STATE OF MISSOURI MEDICAID

CERTIFICATE OF PARTICIPATION IN MEDICARE

ALZHEIMER'S SPECIAL UNIT CERTIFICATION



                                  SCHEDULE 2.20

                               PENDING LITIGATION

CARMEL HILLS

- -     County of Jackson v. Carmel Hills Property LLC,
      Tax Suit No. I2005:
      Serial No. I2005-00114
      Tax Parcel No. 26-130-06-11
      Serial No. I2005-00115
      Tax Parcel No. 26-130-06-34-01

      Dispute regarding application of reassessment against Serial No.
      I2005-00114, and Serial No. I2005-00115. Trial held on December 1, 2005
      and decision is pending. Carmel Hills may file suit against a former tax
      consultant to recoup the damages.

- -     Estate of Betty Williams v. Carmel Hills Living Center

      Wrongful death suit filed July 2003 - trial set for December 4, 2006

- -     Mary Anderson as representative of the Estate of Ralph Anderson v. Carmel
      Hills Living Center

      Wrongful death suit filed May 2004 - mediation tentatively scheduled for
      February 2006

LIBERTY TERRACE

      -     Request for Release of Medical Records of William John Miller filed
            January 18, 2006 [reference is made in the Request that the purpose
            is to investigate a potential wrongful death claim]



                              SCHEDULE 2.20 (CONT.)
                               PENDING LITIGATION

HOLMESDALE

      -     Tonia Jackson v. Holmesdale Care Center, Inc., Case No. 04CV222400
            (Jackson County, MO) - On or about July 29, 2004, Tonia Jackson
            (hereinafter "Plaintiff"), an African American female, filed this
            action in Jackson County, Missouri Circuit Court alleging race and
            sexual harassment. Generally, Plaintiff alleges her supervisor,
            Norman Montgomery, subjected her to a hostile work environment by
            subjecting her to various inappropriate sexual comments and
            behavior, as well as making derogatory comments about her race.
            Holmesdale denies any behavior by Mr. Montgomery rose to the level
            of a hostile work environment and asserts that it effected prompt
            remedial action when it learned of Plaintiff's complaints regarding
            Mr. Montgomery. Company has taken Plaintiff's deposition and
            exchanged written discovery and responses with Plaintiff. In
            addition, Plaintiff has taken a number of depositions, including
            those of a number of alleged fact witnesses and a corporate
            representative of Holmesdale. The parties continue to engage in
            discovery in this matter. There is no trial date set in this matter
            as of yet.

      -     Lisa Hawthorne v. Holmesdale Care Center, Inc., Case No. 0516CV19572
            (Jackson County, MO) - On or about July 15, 2005, Lisa Hawthorne,
            (hereinafter "Plaintiff"), an African American female, filed this
            action in Jackson County, Missouri Circuit Court alleging race
            discrimination. Generally, Plaintiff alleges she was denied pay and
            was forced to resign because of alleged harassment because of her
            race. Holmesdale denies the allegation and asserts that the
            Plaintiff was terminated for engaging in inappropriate language with
            another employee in front of residents, which other employee was a
            Caucasian male. That employee was also terminated for engaging in
            the same inappropriate behavior as Plaintiff. The Company has issued
            written discovery to Plaintiff, to which discovery Plaintiff has
            responded. Plaintiff's deposition is scheduled for February 1, 2006.
            There is no trial date set in this matter as of yet.

      -     Lonnie B. Spearman, in her individual capacity, and as Personal
            Representative of the Estate of Mancy Spearman, Jr. vs. Holmesdale
            Care Center, Inc., Holmesdale Development LLC, and Ramilo I.
            Gatapie, M.D.

            Wrongful death suit filed August 2005 - no trial date set



                                SCHEDULE 2.21(c)

                           EMPLOYEES AND COMPENSATION

NONE



                                SCHEDULE 2.21(d)

                           EMPLOYEES AND COMPENSATION

EMPLOYEES WITH ESTIMATED ANNUAL COMPENSATION OVER $50,000



                                                                         2005
Name                  Facility    Position         Base       Bonus      Wages
- ---------------------------------------------------------------------------------------------------------------------------
                                                                   
Jennifer McGowan      LTCC        Administrator    $65,000               $ 43,603

Barb Shipley          LTCC        DON              $66,000    $    --    $ 70,724

Condon "Lee" Perry    LTCC        RN               $    23               $ 52,546    Hourly

Dianne Williamson     CHLC        Administrator    $50,000    $ 8,553    $ 53,027    * Bonus was for Admissions promoted to
                                                                                     Administrator in April 2005

Pat Harmon            CHLC        DON              $64,890    $    --    $ 63,800

Rose Pelton           CHLC        ADON             $51,417    $    --    $ 52,815
                                  MDS

Kim Purtle            CHLC        Coordinator      $    25    $    --     $49,225    Hourly

Richard Ferling       HCC         Administrator    $60,000               $ 44,690

Angela Martin         HCC         DON              $58,000    $    --    $ 20,300

Mabel Moses-Anid      HCC         RN               $    27    $    --    $ 58,227    Hourly

Wanda Estill          HCC         RN               $    30    $    --    $  2,520    Houly

Eunice Oriaku         HCC         RN               $    30    $    --    $     --    Houly

Lucy Ponnle           HCC         RN               $    30    $    --    $ 39,870    Hourly

Susie Briscoe         Sunset      DOO              $82,000    $78,267    $160,267    $20,034 of bonus for 4th Q 2004




                                  SCHEDULE 2.22

                      ERISA; COMPENSATION AND BENEFIT PLANS

(a)   - Cafeteria Plan Administered by AFLAC affiliate and applicable to all
      three facilities.

      - Health Blue Cross Blue Shield of Kansas City. Employer pays 50% of the
Employee Rate. a PPO and an HMO are offered. See attached Schedule of Benefits

      - Dental - Fortis Dental Benefits. 100% Employee Paid Plan See attached
Schedule of Benefits

      AFLAC. Various Supplemental Insurance Plans, 100% Employee Paid Plans.
Some Pre-Tax Life Insurance plans offered.

- - Bonus-For Administrators at each facility and for Admissions Coordinator at
Holmesdale only and Susie Briscoe Director of Operations bonus paid by Sunset
Healthcare. Director of Operations bonus is 20%of the portion of EBITDAR that
exceeds 18% Operating Margin.

ADMINISTRATOR SCHEDULE: (THE CENSUS PIECE VARIES UPON THE NUMBER OF BEDS AT EACH
FACILITY)

3-Part Bonus Structure ranging from 1%-5% per part for a total possible bonus of
15% of Base Salary

      I.    Budget

            a.    5% Bonus for a Variance of 1/2% or Less of Budgeted Operating
                  Expenses

            b.    4% Bonus for a Variance of 1% or Less of Budgeted Operating
                  Expenses

            c.    3% Bonus for a Variance of 1.5% or Less of Budgeted Operating
                  Expenses

            d.    2% Bonus for a Variance of 2% or Less of Budgeted Operating
                  Expenses

            e.    1% Bonus for a Variance of 2.5% or Less of Budgeted Operating
                  Expenses

      II.   Accounts Receivable: Days Receivable Determined by (A/R Balance) /
            (Average Daily Revenue)

            a.    5% Bonus for Less than 32 Days Receivable

            b.    4% Bonus for Less than 35 Days Receivable

            c.    3% Bonus for Less than 37 Days Receivable

            d.    2% Bonus for Less than 39 Days Receivable

            e.    1% Bonus for Less than 42 Days Receivable

      III.  Census: Based upon 120 for remainder 2003 and 133 for 2004 and
            thereafter

            a.    5% Bonus for 93% Occupancy

            b.    4% Bonus for 90% Occupancy

            c.    3% Bonus for 86% Occupancy

            d.    2% Bonus for 84% Occupancy

            e.    1% Bonus for 82% Occupancy

Bonuses are determined on a six-month basis from date of employment and all
parts will be determined prior to the payment of the bonus. Bonus will be based
on the sum of percentages achieved above times the salary earned for the period.
A lump sum of money will be set aside each year for survey bonus's. Money will
be divided among all employees and Administrator as deemed appropriate by
Administrator.

(d) Upon consummation of the transaction, all employees will be terminated and
will become entitled to receive a payout of all accrued and unused PTO



                                  SCHEDULE 2.24

                                    INSURANCE



Vendor               Policy Type             Amount                   Scope                Period
- --------------------------------------------------------------------------------------------------------------
                                                                               
Philadelphia         Property & Casualty     4,640,000 Bldg           Property/Building    12/2005-12/2006
Insurance-Liberty                                                     Insurance.
                                             350,000 Contents         Business
                                                                      Income/Personal
                                             2,008,600 Bus Income     Property
- --------------------------------------------------------------------------------------------------------------
Philadelphia         Property& Casualty      7,300,000 Bldg           Property/Building    12/2005-12/2006
Insurance - Carmel                                                    Insurance.
                                             743,000 Contents         Business
                                                                      Income/Personal
                                             2,000,000 Bus Income     Property
                                             5,000 Deductible
- --------------------------------------------------------------------------------------------------------------
Philadelphia         Property& Casualty      3,800,000-Bldg           Property/Building    12/2005-12/2006
Insurance  -                                                          Insurance.
Holmesdale                                   222,222 Pers Prop        Business
                                                                      Income/Personal
                                             1,000,000 Bus Income     Property
                                             5,000 Deductible
- --------------------------------------------------------------------------------------------------------------
LCH Liability Trust  Professional &          250,000/500,000          Self Insured Trust   1/2005-1/2006
                     General Liability                                for P&GL claims
                     Insurance Trust                                  at each facility
- --------------------------------------------------------------------------------------------------------------
Health Care          Worker's                1,000,000                Trust for            1/2005-1/2006
Facilities of        Compensation                                     Worker's
Missouri             Insurance                                        compensation
                                                                      Claims
- --------------------------------------------------------------------------------------------------------------





                                  SCHEDULE 3.3

                           PURCHASER REQUIRED CONSENTS

1.    Reasonable assurance that, after the Closing, Purchaser will receive a SNF
      License from Missouri Department of Health and Senior Services

2.    Reasonable assurance that, after the Closing, Purchaser will receive a RCF
      License from Missouri Department of Health and Senior Services

3.    City Occupation License

4.    City Business License

5.    CLIA Laboratory Certification, or waiver

6.    Reasonable assurance that Purchaser, after the Closing, will receive a
      Certificate of Participation in State of Missouri Medicaid

7.    Reasonable assurance that Purchaser, after the Closing, will receive a
      Certificate of Participation in Medicare



                                 SCHEDULE 4.1(b)

                             CONDUCT OF THE BUSINESS

(iv) - Notice of the sale will be given immediately following the expiration of
the Due Diligence Review Period with an effective termination date expected as
of the Closing Date.

(v) - Compensation increases made in connection with annual reviews not to
exceed 5% of the prior year's compensation for such employee and bonuses payable
in accordance with each Company's bonus policy

EX-3.1

                                                                   EXHIBIT 3.1

                           SECOND AMENDED AND RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                         SKILLED HEALTHCARE GROUP, INC.

            Skilled Healthcare Group, Inc., (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, hereby does certify as follows:

            1. This Corporation was originally incorporated under the name
"Fountain View Management, Inc." and the original Certificate of Incorporation
of this Corporation was filed with the Secretary of State of Delaware on July
14, 1997 (the "Original Certificate of Incorporation").

            2. On October 2, 2001, the Corporation filed a petition in the
United States Bankruptcy Court for the Central District of California, Los
Angeles Division (the "Bankruptcy Court") seeking relief under Chapter 11 of the
United States Bankruptcy Code, 11 U.S.C. Section 101-1130 (the "Bankruptcy
Code").

            3. An Amended and Restated Certificate of Incorporation was duly
adopted pursuant to a plan of reorganization confirmed by an order of the
Bankruptcy Court on July 10, 2003 in accordance with Section 303 of Title 8 of
the General Corporation Law of the State of Delaware, and filed with the
Secretary of State of Delaware on August 14, 2003 (the "First Restated
Certificate of Incorporation").

            4. An amendment to the First Restated Certificate of Incorporation
was filed with the Secretary of State of Delaware on October 14, 2003, changing
the name of the Corporation from "Fountain View, Inc." to "Skilled Healthcare
Group, Inc."

            5. This Second Amended and Restated Certificate of Incorporation
(the "Second Restated Certificate of Incorporation"), which restates and
integrates and further amends the First Restated Certificate of Incorporation,
as heretofore amended or supplemented, was duly adopted in accordance with the
provisions of Sections 228, 242 and 245 of the General Corporation Law of the
State of Delaware.

            6. The Certificate of Incorporation of this Corporation shall be
amended and restated to read in full as follows:

      FIRST: The name of this Corporation is Skilled Healthcare Group, Inc.

      SECOND: The address of the Corporation's registered office in the State of
      Delaware is 9 East Loockerman Street, Suite 1B, Dover, Kent County,
      Delaware 19901. The name of the Corporation's registered agent at such
      address is National Registered Agents, Inc.

                                       1

      THIRD: The purpose of the Corporation is to engage in any lawful act or
      activity for which Corporations may be organized under the General
      Corporation Law of the State of Delaware.

      FOURTH: A description of each class and series of stock of the Corporation
      and the voting rights, designations, preferences and relative,
      participating, optional or other special rights, and qualifications,
      limitations or restrictions thereof is as follows:

      1.    Capital Stock. The Corporation shall have two classes of capital
            stock (the "Capital Stock"): Common Stock, $0.01 par value per share
            (the "Common Stock"), and Preferred Stock, $0.01 par value per share
            (the "Preferred Stock").

                  (a) Number of Shares. The total authorized number of shares of
      each class of Capital Stock is (i) 2,500,000 shares of Common Stock, and
      (ii) 1,000,000 shares of Preferred Stock, of which 15,000 shares have been
      designated "Series A Preferred Stock".

                  (b) Preferred Stock. The Preferred Stock may also be issued
      from time to time in one or more series. The Board of Directors ("Board")
      is hereby authorized to provide by resolution for the issuance of shares
      of Preferred Stock in one of more series and, by filing a certificate
      pursuant to the applicable law of the State of Delaware (hereinafter
      referred to as "Preferred Stock Designation"), setting forth such
      resolution, to establish by resolution from time to time the number of
      shares to be included in each such series, and to fix by resolution the
      designation, powers, preferences and rights of the shares of each such
      series and the qualifications, limitations and restrictions thereof. The
      authority of the Board with respect to each series shall include, but not
      be limited to, determination of the following:

                        (i) The designation of the series, which may be by
            distinguishing number, letter or title;

                        (ii) The number of shares of the series, which number
            the Board may thereafter (except where otherwise provided in the
            Preferred Stock Designation) increase or decrease (but not below the
            number of shares thereof then outstanding);

                        (iii) The amounts or rates at which dividends will be
            payable on, and the preferences, if any, of shares of the series in
            respect of dividends, and whether such dividends, if any, shall be
            cumulative or noncumulative;

                        (iv) Dates at which dividends, if any, shall be payable;

                        (v) The redemption rights and price or prices, if any,
            for shares of the series;

                                       2

                        (vi) The terms and amount of any sinking fund, if any,
            provided for the purchase or redemption of shares of the series;

                        (vii) The amounts payable on, and the preferences, if
            any, of shares of the series in the event of any voluntary or
            involuntary liquidation, dissolution or winding up of the affairs of
            the Corporation;

                        (viii) Whether the shares of the series shall be
            convertible into, or exchangeable, or redeemable for, shares of any
            other class or series, or any other security, of the Corporation or
            any other Corporation, and, if so, the specification of such other
            class or series or such other security, the conversion or exchange
            price or prices or rate or rates, any adjustments thereof, the date
            or dates at which such shares shall be convertible or exchangeable
            and all other terms and conditions upon which such conversion or
            exchange may be made;

                        (ix) The voting rights, if any, of the holders of shares
            of the series generally or upon specified events; and

                        (x) Any other rights, powers, preferences of such shares
            as are permitted by law.

                  (c) Series of Common Stock. 2,125,000 shares of the Common
      Stock shall be designated "Class A Common Stock" (the "Class A Common
      Stock") and 375,000 shares of the Common Stock shall be designated "Class
      B Non-Voting Common Stock" (the "Class B Common Stock").

                  (d) Reclassification

                        (i) Effective at the time of the filing with the
            Secretary of State of Delaware of this Second Amended and Restated
            Certificate of Incorporation each share of the Corporation's Common
            Stock, $0.01 par value per share (the "Old Common Stock"), issued
            and outstanding or held in treasury immediately prior to such time
            shall, without any action on the part of the respective holders
            thereof, be reclassified into one (1) fully paid and non-assessable
            share of Class A Common Stock, par value $0.01 per share.

                        (ii) Any stock certificate that immediately prior to the
            time of the filing of this Second Amended and Restated Certificate
            of Incorporation represented shares of Old Common Stock shall, from
            and after such time and without the necessity of presenting the same
            for exchange, represent the same number of shares of Class A Common
            Stock as the number of shares of Old Common Stock previously
            represented by such certificate.

                        (iii) The Corporation or its transfer agent shall
            promptly issue certificates representing the Class A Common Stock in
            exchange for each

                                       3

            certificate representing the Old Common Stock (which such
            certificate shall be marked cancelled).

      2. Dividends and Other Distributions.

                  (a) Dividends on the Series A Preferred Stock.

                        (i) Subject to the rights of series of Preferred Stock
      which may from time to time come into existence, the holders of Series A
      Preferred Stock shall be entitled to receive, when, as and if declared by
      the Board, out of funds legally available therefor, a dividend at the
      annual rate of 12% of the Base Amount (as hereinafter defined) of each
      share of Series A Preferred Stock from and including the date of issuance
      of such share to and including the day on which the Liquidation Value (as
      hereinafter defined) of such share is paid. Such dividends shall accrue
      from day to day, whether or not earned or declared, on each issued and
      outstanding share of Series A Preferred Stock, and shall be cumulative.
      The date on which the Corporation initially issues any share of Series A
      Preferred Stock will be deemed to be its "date of issuance" regardless of
      the number of times transfer of such share is made on the stock records of
      the Corporation and regardless of the number of certificates which may be
      issued to evidence such share, provided, however, that all shares of
      Series A Preferred Stock issued prior to the first Dividend Reference Date
      (as hereinafter defined) shall be deemed, for purposes of this Subsection
      (a), to have been issued on March 27, 1998.

                        (ii) If declared by the Board, dividends on each share
      of Series A Preferred Stock shall be paid on each March 31, commencing
      March 31, 2004 (the "Dividend Reference Dates"), while such share is
      outstanding.

                        (iii) Any dividends that accrue on any share of Series A
      Preferred Stock during the period ending upon such Dividend Reference Date
      that are not paid on such Dividend Reference Date and that have not
      previously been added to the Base Amount of such share shall automatically
      be added to the Base Amount of such share and will remain a part thereof
      until such dividends are paid, at which time the Base Amount shall be
      reduced by such payment.

                        (iv) The "Base Amount" of any share of Series A
      Preferred Stock as of a particular date shall be an amount equal to the
      sum of $1,000.00 plus any unpaid dividends on such share added to the Base
      Amount of such share as provided above and not thereafter paid.

                  (b) Dividends on Common Stock. The holders of record of Common
      Stock shall be entitled to receive such dividends ratably as may from time
      to time be declared by the Board out of funds legally available therefor.

                                       4

      3. Voting Rights.

            Subject to the rights of series of Preferred Stock which may from
time to time come into existence, at every meeting of the stockholders (or for
actions by written consent of stockholders), except as otherwise required by
law, on all matters to be voted on by the stockholders of the Corporation, the
following provisions shall apply:

                  (a) Voting as a Single Class. Except as otherwise required by
      law, the holders of the Class A Common Stock and Series A Preferred Stock
      shall vote together as a single class on all matters presented to the
      stockholders.

                  (b) Voting by Series A Preferred Stock. In any matter to be
      voted on by the holders of the Series A Preferred Stock, each holder of
      Series A Preferred Stock shall have one tenth of one vote for each such
      share held by such holder.

                  (c) Voting by Class A Common Stock. In any matter to be voted
      on by the holders of the Common Stock, each holder of Class A Common Stock
      shall have one vote for each such share held by such holder.

                  (d) Voting by Class B Common Stock. The Class B Common Stock
      shall be non-voting, and the holders thereof, as such, shall not be
      entitled to vote on matters to be voted upon by the stockholders of the
      Corporation.

      4. Liquidation.

                  (a) Series A Preferred Stock. Subject to the rights of any
      series of Preferred Stock which may from time to time come into existence,
      upon any liquidation, dissolution or winding up of the Corporation,
      whether voluntary or involuntary, the holders of Series A Preferred Stock
      shall be entitled, before any distribution or payment is made upon any
      shares of Common Stock, to be paid in cash, in respect of each share of
      Series A Preferred Stock held by such holder, an amount equal to the Base
      Amount of such share on such date, plus all unpaid dividends accrued on
      such share from the previous Dividend Reference Date through the close of
      business on the date of payment (the "Liquidation Value"). If upon such
      liquidation, dissolution or winding up, the assets to be distributed among
      the holders of the shares of Series A Preferred Stock shall be
      insufficient to permit payment to the holders thereof of such amounts,
      then all of the assets of the Corporation then remaining and legally
      available for distribution shall be distributed ratably among the holders
      of the shares of Series A Preferred Stock.

                  (b) Common Stock. Upon any liquidation, dissolution or winding
      up of the Corporation, whether voluntary or involuntary, after payment in
      full of the Liquidation Value of the Series A Preferred Stock and subject
      to the rights, if any, of the holders of any other series of Preferred
      Stock which may from time to time come into existence having a preference
      over or the right to participate with the Common Stock with respect to the
      distribution of assets of the Corporation upon liquidation, dissolution or
      winding up of the Corporation, the holders of the Common Stock shall be
      entitled to

                                       5

      receive ratably all remaining assets of the Corporation to be distributed
      among them, based upon the number of shares of Common Stock held by each
      such holder, subject to the provisions of paragraph (c) of this Section 4.

                  (c) Distribution among the Holders of Class A Common Stock and
      Class B Common Stock. All amounts distributable in respect of the Class A
      Common Stock and the Class B Common Stock shall be divided among such
      shares in the following proportions:

                        (i) Preference of Class A Common Stock. Upon any
      liquidation, dissolution or winding up of the Corporation, whether
      voluntary or involuntary, the holders of Class A Common Stock shall be
      entitled, before any distribution or payment is made upon any Class B
      Common Stock, to be paid in cash, in respect of each share of Class A
      Common Stock an amount per share equal to One Hundred Million Dollars
      ($100,000,000) divided by the number of the then outstanding shares of
      Class A Common Stock (the "Per Share Class A Common Stock Preference"). If
      upon such liquidation, dissolution or winding up, the assets to be
      distributed shall be insufficient to permit payment to the holders of the
      Class A Common Stock of the Per Share Class A Common Stock Preference,
      then all of the assets of the Corporation to be distributed shall be
      distributed ratably among the holders of the shares of Class A Common
      Stock.

                        (ii) Preference of Class B Common Stock. Upon any
      liquidation, dissolution or winding up of the Corporation, whether
      voluntary or involuntary, after payment in full of the Per Share Class A
      Common Stock Preference, the holders of Class B Common Stock shall be
      entitled, before any further distribution or payment is made upon any
      shares of Class A Common Stock, to be paid in cash, in respect of each
      share of Class B Common Stock held by such holder, an amount equal to the
      Per Share Class A Common Stock Preference multiplied by such holder's
      Adjustment Factor (the "Per Share Class B Common Stock Preference"). For
      these purposes, the Adjustment Factor is based on the Terminal Equity
      Value of the Corporation, as such terms are defined in such holder's
      Restricted Stock Agreement with the Corporation, as the same may be
      amended from time to time (the "Applicable Restricted Stock Agreement").
      The Adjustment Factor may result in the Per Share Class B Common Stock
      Preference being less than the Per Share Class A Common Stock Preference.
      The Per Share Class B Common Stock Preference may differ among the holders
      of the Class B Common Stock as a result of varying Adjustment Factors that
      apply to the various holders. Each holder's Adjustment Factor and Terminal
      Equity Value shall be determined by the Corporation's Board of Directors
      pursuant to the terms of the Applicable Restricted Stock Agreement. The
      Terminal Equity Value of the Corporation shall be measured as of the date
      of such liquidation, dissolution or winding up of the Corporation, except
      to the extent there has been a Qualifying Termination (as defined in the
      Applicable Restricted Stock Agreement) of a holder of shares of Class B
      Common Stock that occurs more than nine months prior to such liquidation,
      dissolution or winding up of the Corporation, in which event, Terminal
      Equity Value of the Corporation for such

                                       6

      holder's Class B Common Stock only shall be measured as of the date of
      such holder's Qualifying Termination.

      If upon such liquidation, dissolution or winding up of the Corporation,
      after payment in full of the Per Share Class A Common Stock Preference to
      the holders of the Class A Common Stock, the remaining assets to be
      distributed shall be insufficient to permit payment of an amount to the
      holders of the Class B Common Stock equal to the Per Share Class B Common
      Stock Preference, then all of the assets of the Corporation then remaining
      and which are to be distributed shall be distributed ratably among the
      holders of the shares of Class B Common Stock, based on each holder's
      relative rights that may result due to application of the Adjustment
      Factors.

                        (iii) Distribution of Remaining Assets. Upon any
      liquidation, dissolution or winding up of the Corporation, whether
      voluntary or involuntary, after payment is made to the holders of the
      Class A Common Stock and the Class B Common Stock as provided in the
      preceding paragraphs (i) and (ii) of this Section 4(c), the holders of the
      Class A Common Stock and the Class B Common Stock shall be entitled to
      receive ratably all remaining assets of the Corporation to be distributed
      among them pursuant to Section 4(b), based on the number of shares of
      Class A Common Stock and Class B Common Stock held by each such holder,
      and as to each holder of Class B Common Stock, after application of such
      holder's Adjustment Factor.

      5. Redemption of Series A Preferred Stock.

                  (a) Redemption Upon Initial Public Offering.

                        (i) Promptly after the closing of an underwritten,
      initial public offering of the Corporation's Common Stock for cash
      pursuant to a registration statement under the Securities Act of 1933, as
      amended, the Corporation shall redeem, out of funds legally available
      therefor, all outstanding shares of the Series A Preferred Stock by paying
      in cash to the holders thereof an amount equal to the Liquidation Value
      thereof. Such payment shall be made to the record holders of the Series A
      Preferred Stock and shall be accompanied by written notice specifying the
      number of shares that are being redeemed from each holder.

                        (ii) If the funds legally available to redeem shares of
      Series A Preferred Stock under this Section 5(a) of this Article FOURTH
      are insufficient to redeem all of the outstanding shares of Series A
      Preferred Stock at any time, the Corporation shall redeem the maximum
      number of shares of Series A Preferred Stock that the Corporation has
      funds legally available therefor on a pro rata basis among all of the
      holders of Series A Preferred Stock according to the number of shares of
      Series A Preferred Stock owned by each holder, and shall quarterly
      thereafter redeem the maximum number of shares of Series A Preferred Stock
      that the Corporation has funds legally available therefor on a pro rata
      basis among all of the holders of Series A Preferred Stock according to
      the number of shares of Series A Preferred Stock then owned by each
      holder.

                                       7

                        (iii) Promptly after each holder of Series A Preferred
      Stock has received payment of the Liquidation Value thereof, such holder
      shall surrender certificates evidencing the Series A Preferred Stock so
      redeemed, and shall thereupon be entitled to receive a replacement
      certificate for any shares of Series A Preferred Stock not redeemed.

                        (iv) After any payment under this Section 5(a) of this
      Article FOURTH, the redeemed shares of Series A Preferred Stock shall be
      cancelled on the Corporation's records and shall cease to be outstanding.

                  (b) Redemption at Corporation's Option.

                        (i) The Corporation may at any time, at its option,
      redeem some or all shares of Series A Preferred Stock, out of funds
      legally available therefor, at a price per share equal to the Liquidation
      Value as of the date of redemption. Such redemption shall be made by
      paying such amount to the record holders of the Series A Preferred Stock
      and shall be accompanied by written notice specifying the number of shares
      that are being redeemed from each holder. All such redemptions shall be
      pro rata among the holders of Series A Preferred Stock according to the
      number of shares of Series A Preferred Stock owned by each holder.

                        (ii) Promptly after each record holder of Series A
      Preferred Stock has received payment of the Liquidation Value thereof
      pursuant to this Section 5(b) of this Article FOURTH, such holder shall
      surrender certificates evidencing the Series A Preferred Stock so
      redeemed, and shall thereupon be entitled to receive a replacement
      certificate for any shares of Series A Preferred Stock not redeemed.

                        (iii) After any payment under this Section 5(b) of this
      Article FOURTH, the redeemed shares of Series A Preferred Stock shall be
      cancelled on the Corporation's records and shall cease to be outstanding.

                  (c) Mandatory Redemption.

                        (i) The Corporation shall, on the first business day
      following May 1, 2010 (or, if the Corporation's Senior Subordinated
      Secured Increasing Rate Notes due 2008 have not then been paid in full,
      immediately after the date on which such Notes have been paid in full),
      redeem all shares of Series A Preferred Stock then outstanding, out of
      funds legally available therefor, at a price per share equal to the
      Liquidation Value as of the date of redemption. Such redemption shall be
      made by paying such amount to the record holders of the Series A Preferred
      Stock and shall be accompanied by written notice specifying the number of
      shares that are being redeemed from each holder. In the event the funds
      legally available to redeem shares of Series A Preferred Stock are
      insufficient to redeem all of the outstanding shares of Series A Preferred
      Stock, the Corporation shall redeem the maximum number of shares of Series
      A Preferred Stock that the Corporation has funds legally available
      therefor on a pro rata basis among the holders of Series A Preferred Stock
      and shall quarterly thereafter redeem the maximum

                                        8

      number of shares of Series A Preferred Stock that the Corporation has
      funds legally available therefor on a pro rata basis among the holders of
      Series A Preferred Stock, at the then applicable Liquidation Value. All
      such redemptions shall be pro rata among the holders of Series A Preferred
      Stock.

                        (ii) Promptly after each record holder of Series A
      Preferred Stock has received payment of the Liquidation Value thereof
      pursuant to this Section 5(c) of this Article FOURTH, such holder shall
      surrender certificates evidencing the Series A Preferred Stock so
      redeemed, and shall thereupon be entitled to receive a replacement
      certificate for any shares not redeemed.

                        (iii) After any payment under this Section 5(c) of this
      Article FOURTH, the redeemed shares shall be canceled on the Corporation's
      records and shall cease to be outstanding.

      6. Conversion Rights.

                  (a) No Conversion Rights for Series A Preferred Stock. The
      holders of the Series A Preferred Stock shall not have any rights to
      convert such shares into shares of any other class or series of stock or
      into any other securities of, or any other interest in, the Corporation.

                  (b) Conversion Rights for the Class B Common Stock. The
      holders of the Class B Common Stock shall have the following conversion
      rights:

                        (i) Automatic Conversion. Each share of Class B Common
      Stock shall automatically convert into Class A Common Stock, without the
      payment of any additional consideration by the holder thereof to the
      Corporation, immediately prior to:

                  (A)   The closing of a public offering pursuant to an
                        effective registration statement under the Securities
                        Act of 1933, as amended, covering the offer and sale of
                        Common Stock for the account of the Corporation to the
                        public and the Common Stock becomes listed or quoted on
                        a national security exchange or in the NASDAQ National
                        Market Quotation System ("IPO"); or

                  (B)   The date as of which at least a majority of the Class A
                        Common Stock is sold in a single transaction or series
                        of substantially related transactions and, unless
                        otherwise approved by the Corporation's Board, the
                        consideration paid is cash or marketable securities, in
                        each case as determined in good faith by the
                        Corporation's Board ("Stock Sale").

                        (ii) Conversion Ratio. Each share of the Class B Common
      Stock held by a holder shall convert into not more than one share of Class
      A Common

                                       9

      Stock, with the exact number to be based on the "Conversion Ratio" set
      forth in, and determined pursuant to, the Applicable Restricted Stock
      Agreement of such holder. The applicable Conversion Ratio is based on the
      Terminal Equity Value of the Corporation and shall be determined by the
      Corporation's Board of Directors pursuant to the terms of that Applicable
      Restricted Stock Agreement. Terminal Equity Value shall be measured as of
      the date of such Stock Sale or IPO, as applicable, except to the extent
      there has been a Qualifying Termination of a holder of Class B Common
      Stock more than nine months prior to such Stock Sale or IPO, in which
      event, the Terminal Equity Value of the Corporation shall be measured for
      such holder's Class B Common Stock only as of the date of such holder's
      Qualifying Termination.

                        (iii) Mechanics of Conversion. No fractional shares of
      Common Stock shall be issued upon conversion of Class B Common Stock. In
      lieu of any fractional shares to which the holder would otherwise be
      entitled, the Corporation shall pay cash equal to such fraction multiplied
      by the fair market value of the Class A Common Stock, as determined by the
      Corporation's Board of Directors pursuant to the Applicable Restricted
      Stock Agreement.

                        (iv) Adjustments for Stock Dividends, Subdivisions,
      Combinations or Consolidations of Class A Common Stock. In the event the
      outstanding shares of Class A Common Stock shall be subdivided (by stock
      split or otherwise), into a greater number of shares of Class A Common
      Stock, or the Corporation shall issue additional shares of Class A Common
      Stock in a stock dividend, or the outstanding shares of Class A Common
      Stock shall be combined or consolidated, by reclassification or otherwise,
      the Conversion Ratio for the Class B Common Stock then in effect shall,
      concurrently with the effectiveness of such subdivision, stock dividend,
      combination, consolidation or reclassification, be proportionately
      adjusted.

      7.    No Sinking Fund. No sinking fund shall be established for the
            retirement or redemption of the Series A Preferred Stock.

      8.    No Transfer of Class B Common Stock. No record or beneficial owner
            of shares of Class B Common Stock may transfer, sell, assign, gift,
            bequest, appoint or otherwise dispose of any shares of Class B
            Common Stock.

      9.    No Other Rights. The Series A Preferred Stock and Class B Common
            Stock shall not have any designations, preferences, or relative,
            participating, optional, or other special rights, except as set
            forth in this Second Restated Certificate of Incorporation or as
            otherwise required by law.

      FIFTH: Following the date the Corporation first has a class of securities
      registered under Section 12 of the Securities Exchange Act of 1934, as
      amended, no action required or permitted to be taken at any annual or
      special meeting of the stockholders of the Corporation may be taken by
      written consent without a meeting, except by a written consent signed by
      all stockholders of the Corporation entitled to vote thereon.

                                       10

      SIXTH:

      1.    Elections of Directors need not be by ballot unless the By-Laws of
            the Corporation shall so provide.

      2.    The business and affairs of the Corporation shall be managed by or
            under the direction of the Board.

      3.    Unless a greater vote requirement in any matter is provided in this
            Second Restated Certificate of Incorporation or the By-Laws, the
            affirmative vote of a majority of the Directors present and acting
            at a duly constituted meeting at which a majority of the entire
            Board is present and acting, is sufficient for all action of the
            Board.

      4.    Any action required or permitted to be taken by the Board may be
            taken without a meeting if all members of the Board consent in
            writing to the adoption of resolutions authorizing the action.

      5.    The Board shall have the power to adopt, amend or repeal the By-Laws
            of the Corporation.

      SEVENTH: The Board shall have that number of Directors set out in the
      By-Laws of the Corporation as adopted or as set from time to time by a
      duly adopted amendment thereto by the Directors or stockholders of the
      Corporation.

      EIGHTH: The Corporation shall have perpetual existence.

      NINTH:

      1.    The personal liability of the Directors of the Corporation is hereby
            eliminated to the fullest extent permitted by paragraph (7) of
            subsection (b) of Section 102 of the General Corporation Law of the
            State of Delaware, as the same may be amended and supplemented.

      2.    To the fullest extent permitted by Section 145 of the General
            Corporation Law of the State of Delaware, as the same may be amended
            and supplemented, the Corporation shall indemnify each director and
            officer of the Corporation, and may indemnify any other persons to
            whom it shall have power to indemnify under said section, from and
            against any and all of the expenses, liabilities or other matters
            referred to in or covered by said section, and the indemnification
            provided for herein shall not be deemed exclusive of any other
            rights to which those indemnified may be entitled under any By-Law,
            agreement, vote of stockholders or disinterested Directors or
            otherwise, both as to action in his or her official capacity and as
            to action in another capacity while holding such office, and shall
            continue as to a person who has ceased to be a Director, officer,
            employee or

                                       11

            agent and shall inure to the benefit of the heirs, executors and
            administrators of such person.

      3.    The right to indemnification conferred by this Article NINTH shall
            include the right to be paid by the Corporation the expenses
            incurred in defending or otherwise participating in any proceeding
            in advance of its final disposition upon receipt by the Corporation
            of an undertaking by or on behalf of the person receiving
            advancement to repay the amount advanced if it shall ultimately be
            determined that such person is not entitled to be indemnified by the
            Corporation under this Article NINTH.

      4.    Neither any amendment nor repeal of this Article NINTH, nor the
            adoption of any provision of this Second Restated Certificate of
            Incorporation inconsistent with this Article NINTH, shall eliminate
            or reduce the effect of this Article NINTH in respect of any matter
            occurring, or any action or proceeding accruing or arising or that,
            but for this Article NINTH, would accrue or arise, prior to such
            amendment, repeal or adoption of an inconsistent provision.

      TENTH:

      The Corporation reserves the right to amend and repeal any provision
      contained in this Second Restated Certificate of Incorporation in the
      manner prescribed by the laws of the State of Delaware. All rights herein
      conferred are granted subject to this reservation.

                            [Signature Page Follows]

                                       12

            IN WITNESS WHEREOF, Skilled Healthcare Group, Inc., has caused this
Second Restated Certificate of Incorporation to be signed by Roland Rapp, its
Secretary, this 4th day of March, 2004.

                                SKILLED HEALTHCARE GROUP, INC.


                                By:      \s\ Roland Rapp
                                         ---------------------------
                                         Roland Rapp
                                         Secretary

                                       13

EX-3.2

                          AMENDED AND RESTATED BY-LAWS
                                       OF
                         SKILLED HEALTHCARE GROUP, INC.

1.   IDENTIFICATION; OFFICES.

     1.1    Principal and Business Offices.  Skilled Healthcare Group, Inc. (the
"Corporation") may have such principal and other business offices, either within
or outside of the state of Delaware, as the Board may designate or as the
Corporation's business may require from time to time.

     1.2    Registered Agent and Office.  The Corporation's registered agent may
be changed from time to time by or under the authority of the Board. The address
of the Corporation's registered agent may change from time to time by or under
the authority of the Board or the registered agent. The business office of the
Corporation's registered agent shall be identical to the registered office. The
Corporation's registered office may be but need not be identical with the
Corporation's principal office in the state of Delaware.

2.   MEETINGS OF STOCKHOLDERS.

     2.1    Annual Meeting.  The annual meeting of stockholders shall be held on
such date and at such time as shall be designated from time to time by the board
of directors (the "Board") and stated in the notice of the meeting.

     2.2    Special Meetings.  Special meetings of the stockholders may be
called by resolution of the Board or by the chief executive officer and shall be
called by the chief executive officer or secretary upon the written request
(stating the purpose or purposes of the meeting) of a majority of the directors
then in office or of the holders of 51% of the outstanding shares entitled to
vote. Only business related to the purposes set forth in the notice of the
meeting may be transacted at a special meeting.

     2.3    Place and Time of Meetings.  Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
directors or stockholders requesting the meeting. If no such place is designated
by the Board, the place of meeting will be the principal business office of the
Corporation.

     2.4    Notice of Meetings; Waiver of Notice.  Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who submits a signed waiver of notice before or after the meeting,
and (b) no notice of an adjourned meeting need be given except when required
under Section 2.5 of these by-laws. Each notice of a meeting shall be given,
personally or by mail, not less than ten (10) nor more than sixty (60) days
before the meeting and shall state the time and place of the meeting, and unless
it is the annual meeting, shall state at whose direction or request the meeting
is called and the purposes for which it is called. If mailed, notice shall be
considered given when mailed to a stockholder at his address on the
Corporation's records. The attendance of any stockholder at a meeting, without
protesting at the beginning of the meeting that the meeting is not lawfully
called or convened, shall constitute a waiver of notice by him or her.


                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 1 OF 10

     2.5         Quorum.  At any meeting of stockholders, unless otherwise
provided these by-laws or in the Corporation's Certificate of Incorporation, as
amended and/or restated (the "Certificate of Incorporation"), the presence in
person or by proxy of the holders of a majority of the shares entitled to vote
shall constitute a quorum for the transaction of any business. In the absence of
a quorum a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present any action may be taken which might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given if the time and place are announced at the meeting at
which the adjournment is taken except that, if adjournment is for more than
thirty (30) days or if, after the adjournment, a new record date is fixed for
the meeting, notice of the adjourned meeting shall be given pursuant to Section
2.4.  The stockholders present at a meeting may continue to transact business
until adjournment, notwithstanding the withdrawal of such number of stockholders
as may leave less than a quorum.

     2.6         Voting; Proxies.  Unless otherwise provided by the Certificate
of Incorporation, each stockholder of record shall be entitled to one (1) vote
for every share registered in his or her name.  Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by Section 2.8 of these by-laws.  Directors shall be elected
in the manner provided in Section 3.1 of these by-laws.  Voting need not be by
ballot unless requested by a stockholder at the meeting or ordered by the
chairman of the meeting; however, all elections of directors shall be by written
ballot, unless otherwise provided in the Certificate of Incorporation.  Each
stockholder entitled to vote at any meeting of stockholders or to express
consent to or dissent from corporate action in writing without a meeting may
authorize another person to act for him by proxy.  Every proxy must be signed by
the stockholder or his attorney-in-fact.  No proxy shall be valid after three
(3) years from its date unless it provides otherwise.  A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power.  A proxy may remain irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the Corporation generally.

     2.7        List of Stockholders.  Not less than ten (10) days prior to the
date of any meeting of stockholders, the secretary of the Corporation shall
prepare a complete list of stockholders entitled to vote at the meeting,
arranged in alphabetical order and showing the address of each stockholder and
the number of shares registered in his name.  For a period of not less than ten
(10) days prior to the meeting, the list shall be available during ordinary
business hours for inspection by any stockholder for any purpose germane to the
meeting. During this period, the list shall be kept either (a) at a place within
the city where the meeting is to be held, if that place shall have been
specified in the notice of the meeting, or (b) if not so specified, at the place
where the meeting is to be held.  The list shall also be available for
inspection by stockholders at the time and place of the meeting.

     2.8        Action by Consent Without a Meeting.  Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting.  Prompt notice of the taking of any such
action shall be given

                          AMENDED AND RESTATED BY-LAWS
                       OF SKILLED HEALTHCARE GROUP, INC.
                                  Page 2 of 10

to those stockholders who did not consent in writing.  In the event that the
action which is consented to is such as would have required the filing of a
certificate with any governmental body, if such action had been voted on by
stockholders at a meeting thereof, the certificate filed shall state, in lieu of
any statement required by law concerning any vote of stockholders, that written
consent had been given in accordance with the provisions of Section 228 of the
Delaware General Corporation Law, and that written notice has been given as
provided in such section.

     2.9         Ratification of Acts of Directors and Officers.  Except as
otherwise provided by law or by the Certificate of Incorporation of the
Corporation, any transaction or contract or act of the Corporation or of the
directors or the officers of the Corporation may be ratified by the affirmative
vote of the holders of the number of shares which would have been necessary to
approve such transaction, contract or act at a meeting of stockholders, or by
the written consent of stockholders in lieu of a meeting.

     2.10        Organization.  Such person as the Board may designate or, in
the absence of such a designation, the chief executive officer of the
Corporation or, in his or her absence, such person as may be chosen by the
holders of a majority of the shares entitled to vote who are present, in person
or by proxy, shall call to order any meeting of the stockholders and act as
chairman of such meeting.  In the absence of the secretary of the Corporation,
the chairman of the meeting shall appoint a person to serve as secretary at the
meeting.

3.      BOARD OF DIRECTORS.

     3.1          Number, Qualification, Election and Term of Directors.  The
business of the Corporation shall be managed by the Board which shall consist of
at least one (1) and not more than nine (9) directors with the actual number to
be determined from time to time by resolution of the Board, but no decrease may
shorten the term of any incumbent director.   Directors shall be elected at each
annual meeting of stockholders by a plurality of the votes cast and shall hold
office until the next annual meeting of stockholders and until the election and
qualification of their respective successors, subject to the provisions of
Section 3.9.  Directors need not be residents of the State of Delaware.
Elections of directors need not be by written ballot.  As used in these by-laws,
the term "entire Board" means the total number of directors which the
Corporation would have if there were no vacancies on the Board.

     3.2         Quorum and Manner of Acting.  A majority of the directors then
in office shall constitute a quorum for the transaction of business at any
meeting, except as provided in Section 3.10 of these by-laws.  Action of the
Board shall be authorized by the vote of a majority of the directors present at
the time of the vote if there is a quorum, unless otherwise provided by law, the
Certificate of Incorporation or these by-laws.  In the absence of a quorum, a
majority of the directors present may adjourn any meeting from time to time
until a quorum is present.

     3.3         Place of Meetings.  Meetings of the Board may be held in or
outside Delaware.

     3.4         Annual and Regular Meetings.  Annual meetings of the Board, for
the election of officers and consideration of other matters, shall be held
either (a) without notice immediately after the annual meeting of stockholders
and at the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 3.6 of these by-laws.


                          AMENDED AND RESTATED BY-LAWS
                       OF SKILLED HEALTHCARE GROUP, INC.
                                  Page 3 of 10


Regular meetings of the Board may be held without notice at such times and
places as the Board determines.  If the day fixed for a regular meeting is a
legal holiday, the meeting shall be held on the next business day.

     3.5     Special Meetings.  Special meetings of the Board may be called by
the chairman of the board, the chief executive officer or by at least one-third
of the number of the directors constituting the whole Board.  Only business
related to the purposes set forth in the notice of meeting may be transacted at
a special meeting.  The person or persons authorized to call special meetings of
the Board may fix any place, as the place for holding any special meeting of the
Board called by them.

     3.6     Notice of Meetings; Waiver of Notice.  Notice of the time and place
of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to the director at his or her
residence or usual place of business at least three (3) days before the meeting,
or by delivering it via delivery, telephone, facsimile or email at least two (2)
days before the meeting.  Notice of a special meeting shall also state the
purpose or purposes for which the meeting is called.  Notice need not be given
to any director who submits a signed waiver of notice before or after the
meeting or who attends the meeting without protesting at the beginning of the
meeting the transaction of any business because the meeting was not lawfully
called or convened.  Notice of any adjourned meeting need not be given, other
than by announcement at the meeting at which the adjournment is taken.

     3.7     Board or Committee Action Without a Meeting.  Unless otherwise
restricted by the Certificate of Incorporation or these by-laws, any action
required or permitted to be taken by the Board or by any committee of the Board
may be taken without a meeting if all of the members of the Board or of the
committee consent in writing to the adoption of a resolution authorizing the
action.  The resolution and the written consents by the members of the Board or
the committee shall be filed with the minutes of the proceeding of the Board or
of the committee.

     3.8     Participation in Board or Committee Meetings by Conference
Telephone.  Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time.  Participation
by such means shall constitute presence in person at the meeting.

     3.9     Resignation and Removal of Directors.  Any director may resign at
any time by delivering his or her resignation in writing to the chief executive
officer, the president or the secretary of the Corporation, to take effect at
the time specified in the resignation; the acceptance of a resignation, unless
required by its terms, shall not be necessary to make it effective.  Any or all
of the directors may be removed at any time, either with or without cause, by
vote of the holders of a majority of the shares then entitled to vote at an
election of directors.


     3.10    Vacancies.  Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 4 OF 10

    3.11    Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid
for serving the Corporation, its affiliates or subsidiaries in other capacities.

4.    COMMITTEES.

     4.1     Executive Committee. The Board, by resolution adopted by a
majority of the entire Board, may designate an Executive Committee of one or
more directors which shall have all the powers and authority of the Board,
except as otherwise provided in the resolution, section 141(c) of the Delaware
General Corporation Law, or any other applicable law. The members of the
Executive Committee shall serve at the pleasure of the Board. All action of the
Executive Committee shall be reported to the Board at its next meeting.

     4.2     Other Committees. The Board, by resolution adopted by a majority
of the entire Board, may designate other committees of one or more directors,
which shall serve at the Board's pleasure and have such powers and duties as the
Board determines.

     4.3     Rules Applicable to Committees. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of any member of a committee, the member or members present at
a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt rules of procedure
and shall meet as provided by those rules or by resolutions of the Board.

5.     OFFICERS.

     5.1     Number; Security. The officers of the Corporation shall consist of
a president, a secretary, a treasurer, and, if deemed necessary, expedient, or
desirable by the Board, a chief executive officer, chief financial officer, a
chairman of the Board, a vice-chairman of the Board, an executive
vice-president, one or more other vice-presidents, and such other officers with
such titles as the resolution of the Board choosing them shall designate.
Except as may otherwise be provided in the resolution of the Board choosing him,
no officer other than the chairman or vice-chairman of the Board, if any, need
be a director. Any two (2) or more offices may be held by the same person. The
Board may require any officer, agent or employee to give security for the
faithful performance of his duties.

     5.2     Election; Term of Office. The officers of the Corporation shall be
elected annually by the Board at the regular meeting of the Board held after
each annual meeting of the stockholders. If the election of officers is not
held at such meeting, such election shall be held as soon thereafter as may be
convenient.   New offices of the Corporation may be created and filled and
vacancies in offices may be filled at any time, at a meeting or by the written
consent of the Board. Unless removed pursuant to Section 5.4 of these by-laws,
each officer shall hold office until his successor has been duly elected and
qualified, or until his earlier death or resignation. Election or appointment of
an officer or agent shall not of itself create contract rights.

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 5 OF 10

     5.3     Subordinate Officers.  The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.

     5.4     Resignation and Removal of Officers.  Any officer may resign at any
time by delivering his resignation in writing to the chief executive officer,
the president or the secretary of the Corporation, to take effect at the time
specified in the resignation; the acceptance of a resignation, unless required
by its terms, shall not be necessary to make it effective.  Any officer
appointed by the Board or appointed by an executive officer or by a committee
may be removed by the Board either with or without cause, and in the case of an
officer appointed by an executive officer or by a committee, by the officer or
committee who appointed him or her or by the chief executive officer.

     5.5     Vacancies.  A vacancy in any office may be filled for the unexpired
term in the manner prescribed in Sections 5.2 and 5.3 of these by-laws for
election or appointment to the office.

     5.6     The Chairman of the Board.  The chairman of the Board, if any,
shall preside at all meetings of the Board.  Subject to the control of the
Board, he or she shall have general supervision over the business of the
Corporation and shall have such other powers and duties as chairmen of the board
usually have or as the Board assigns to him or her.

     5.7     Vice Chairman of the Board.  The vice chairman or vice chairmen
shall perform such duties and have such powers as the chairman of the board or
the Board may from time to time prescribe.

     5.8     The Chief Executive Officer.  The Board shall designate whether
there shall be a chief executive officer and the chief executive officer shall
serve at the pleasure of the Board. The chief executive officer shall be the
principal executive officer of the Corporation and shall in general supervise
and control all of the business and affairs of the Corporation, unless otherwise
provided by the Board. The chief executive officer shall preside at all
meetings of the stockholders and of the Board and shall see that orders and
resolutions of the Board are carried into effect. The chief executive officer
may sign bonds, mortgages, certificates for shares and all other contracts and
documents whether or not under the seal of the Corporation except in cases where
the signing and execution thereof shall be expressly delegated by law, by the
Board or by these by-laws to some other officer or agent of the Corporation.
The chief executive officer shall have general powers of supervision and shall
be the final arbiter of all differences between officers of the Corporation and
his decision as to any matter affecting the Corporation shall be final and
binding as between the officers of the Corporation subject only to the Board.


     5.9     The President.  In the absence of the chief executive officer or in
the event of his inability or refusal to act, the president shall perform the
duties of the chief executive officer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the chief executive
officer. At all other times the president shall have the active management of
the business of the Corporation under the general supervision of the chief
executive officer. The president shall have concurrent power with the chief
executive officer to sign bonds,

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 6 OF 10

mortgages, certificates for shares and other contracts and documents, whether or
not under the seal of the Corporation except in cases where the signing and
execution thereof shall be expressly delegated by law, by the Board or by these
by-laws to some other officer or agent of the Corporation. In general, the
president shall perform all duties incident to the office of president and such
other duties as the chief executive officer or the Board may from time to time
prescribe.


     5.10    Vice President.  Each vice president shall have such powers and
duties as the Board, the chief executive officer or the president assigns to him
or her. In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the Board or, if not ranked, a vice
president designated by the Board or chief executive officer shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board, these Bylaws, the chief
executive officer, the president or the chairman of the board.

     5.11    The Chief Financial Officer.  The chief financial officer, if any,
shall be the chief financial officer of the Corporation and shall be in charge
of the Corporation's books and accounts. Subject to the control of the Board, he
shall have such other powers and duties as the Board or the chief executive
officer assigns to him or her.

     5.12    The Treasurer.  The treasurer shall be the treasurer of the
Corporation. Subject to the control of the Board, he or she shall have such
other powers and duties as the Board or the chief financial officer or the chief
executive officer assigns to him or her. The treasurer shall have the custody
of the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board.  The
treasurer  shall disburse the funds of the Corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render to the
president and the Board, at its regular meetings, or when the Board so requires,
an account of all his transactions as treasurer and of the financial condition
of the Corporation.

     5.13    The Assistant Treasurer.  The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
Board (or if there be no such determination, then in the order of their
election), shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
chief executive officer or the Board may from time to time prescribe.

     5.14    The Secretary.  The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he or she shall
have such powers and duties as the Board, the chief executive officer or the
president assigns to him or her. In the absence of the secretary from any
meeting, the minutes shall be kept by the person appointed for that purpose by
the presiding officer.

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 7 OF 10

     5.15    The Assistant Secretary.  The assistant secretary, or if there be
more than one, the assistant secretaries in the order determined by the Board
(or if there be no such determination, then in the order of their election),
shall, in the absence of the secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the secretary and
shall perform such other duties and have such other powers as the chief
executive officer or the Board may from time to time prescribe.

     5.16    Salaries.  The Board may fix the officers' salaries, if any, or it
may authorize the chief executive officer to fix the salary of any other
officer.

     5.17    Absence of Officers.  In the absence of any officer of the
Corporation, or for any other reason the Board may deem sufficient, the Board
may delegate the powers or duties, or any of such powers or duties, of any
officers or officer to any other officer or to any director.

6.      SHARES.

     6.1     Certificates.  The Corporation's shares shall be represented by
certificates in the form approved by the Board; provided that the Board may
provide by resolution or resolutions that some or all of any or all classes or
series of its stock shall be uncertificated shares.  Any such resolution shall
not apply to shares represented by a certificate until such certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board, every holder of uncertificated shares shall be entitled
to have a certificate. Each certificate shall be signed by, the president or a
vice president and by the secretary or an assistant secretary, or the treasurer
or an assistant treasurer, and shall be sealed with the Corporation's seal or a
facsimile of the seal. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if such
person or entity were such officer, transfer agent or registrar at the date of
issue.

     6.2     Transfers.  Shares shall be transferable only on the Corporation's
books, upon surrender of the certificate for the shares, properly endorsed. The
Board may require satisfactory surety before issuing a new certificate to
replace a certificate claimed to have been lost or destroyed.

     6.3     Determination of Stockholders of Record.  The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than sixty (60) or less than
ten (10) days before the date of the meeting or more than sixty (60) days before
any other action. If no record date is fixed by the Board: (a) the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (b) the record date
for determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board is required by law, shall
be the first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 8 OF 10

Corporation by delivery to its registered office in the State of Delaware, its
principal office, or an officer or agent of the Corporation having custody of
the book in which the proceedings of meetings of stockholders are recorded
(delivery to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested); and (c) if prior action
by the Board is required by law, the record date for determining stockholders'
consent to corporate action in writing without a meeting shall be the close of
business on the day on which the Board adopts the resolution taking such prior
action.

7.      MISCELLANEOUS.

     7.1     Seal.  The Board shall adopt a corporate seal, which shall be in
the form of a circle and shall bear the Corporation's name and the year and
state in which it was incorporated.

     7.2     Fiscal Year.  The Board may determine the Corporation's fiscal
year. Until changed by the Board, the Corporation's fiscal year shall be the
calendar year.

     7.3     Voting of Shares in Other Corporations.  Shares in other
corporations which are held by the Corporation may be represented and voted by
the chief executive officer, the president or a vice president of this
Corporation or by proxy or proxies appointed by one of them. The Board may,
however, appoint some other person to vote the shares.

     7.4     Amendments.  These by-laws may be amended, repealed or adopted by
the stockholders or by a majority of the entire Board, but any by-law adopted by
the Board may be amended or repealed by the stockholders.

     7.5     Dividends.  The Board may declare and pay dividends upon the shares
of the Corporation's capital stock in any form determined by the Board, in the
manner and upon the terms and conditions provided by law and the Certificate of
Incorporation.

     7.6     Contracts.  The Board may authorize any officer or officers, agent
or agents, to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.

     7.7     Checks, Drafts, Etc.  All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by one or more officers or agents of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board.

     7.8     Deposits.  The funds of the Corporation may be deposited or
invested in such bank account, in such investments or with such other
depositaries as determined by the Board.

8.      INDEMNIFICATION.

     8.1     Right to Indemnification of Directors and Officers.  The
Corporation shall indemnify and hold harmless, to the fullest extent permitted
by applicable law as it presently exists or may hereafter be amended, any person
(a "Covered Person") who was or is made or is threatened to be made a party or
is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact

                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 9 OF 10

that such person, or a person for whom such person is the legal representative,
is or was a director or officer of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
Covered Person in such proceeding. Notwithstanding the preceding sentence,
except as otherwise provided in Section 8.3, the Corporation shall be required
to indemnify a Covered Person in connection with a proceeding (or part thereof)
commenced by such Covered Person only if the commencement of such proceeding (or
part thereof) by the Covered Person was authorized in advance by the Board.

     8.2     Prepayment of Expenses of Directors and Officers.  The Corporation
shall pay the expenses (including attorneys' fees) incurred by a Covered Person
in defending any proceeding in advance of its final disposition, provided,
however, that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the Covered Person to repay all amounts advanced if
it should be ultimately determined that the Covered Person is not entitled to be
indemnified under this Section 8 or otherwise.

     8.3     Indemnification Agreement.  If a Covered Person is entitled to
indemnification or advancement of expenses pursuant to any employment or other
agreement with the Corporation, the terms of such agreement shall apply in lieu
of this Section 8.

     8.4     Non Exclusivity of Rights.  The rights conferred on any person by
this Section 8 shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, these by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.

     8.5     Other Indemnification.  The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director, officer
or employee of another corporation, partnership, joint venture, trust,
organization or other enterprise shall be reduced by any amount such person
shall collect as indemnification from such other corporation, partnership, joint
venture, trust, organization or other enterprise.

     8.6     Insurance.  The Board may, to the full extent permitted by
applicable law as it presently exists, or may hereafter be amended from time to
time, authorize an appropriate officer or officers to purchase and maintain at
the Corporation's expense insurance: (a) to indemnify the Corporation for any
obligation which it incurs as a result of the indemnification of directors,
officers and employees under the provisions of this Section 8; and (b) to
indemnify or insure directors, officers and employees against liability in
instances in which they may not otherwise be indemnified by the Corporation
under the provisions of this Section 8.

     8.7     Amendment or Repeal.  Any repeal or modification of the foregoing
provisions of this Section 8 shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification. The rights provided hereunder shall inure
to the benefit of any Covered Person and such person's heirs, executors and
administrators.


                          AMENDED AND RESTATED BY-LAWS
                        OF SKILLED HEALTHCARE GROUP, INC.
                                  PAGE 10 OF 10

EX-3.3

                                                                   Exhibit 3.3

                          CERTIFICATE OF INCORPORATION

                                       OF

                            Locomotion Holdings, Inc.

     THE UNDERSIGNED, for the purpose of forming a corporation pursuant to the
provisions of the General Corporation law of the State of Delaware, does hereby
certify as follows:

     FIRST: The name of the Corporation is Locomotion Holdings, Inc. (the
"Corporation").

     SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, 19801 and the name of the Corporation's registered agent
at such address is The Corporation Trust Company.

     THIRD: The purpose for which the Corporation is organized is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.

     FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 3,000 shares of Class A Common Stock, $.01 par value.

     FIFTH: The name and the mailing address of the incorporator is as follows:



NAME                  MAILING ADDRESS
- ----                  ---------------
                   
Kathleen M. Sablone   Choate, Hall & Stewart
                      Exchange Place
                      53 State Street
                      Boston, MA 02109


     SIXTH: The Directors shall have power to adopt, amend, or repeal the
By-Laws of the Corporation.

     SEVENTH: Election of Directors need not be by written ballot unless the
By-Laws of the Corporation so provide.

     EIGHTH: The Corporation shall indemnify and hold harmless any director,
office, employee or agent of the Corporation from and against any and all
expenses and liabilities that may be imposed upon or incurred in connection
with, or as a result of, any proceeding in which he or she may become involved,
as a party or otherwise, by reason of the fact that he or she is or was such a
director, officer, employee or agent, whether or not he or she continues to be
such at the time such expenses and liabilities shall have been imposed or
incurred, to the fullest extent permitted by the laws of the State of Delaware
as they may be amended from time to time.



     NINTH: No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of Title 8 of the General Corporation Law of the
State of Delaware or (iv) for any transaction from which the director derived an
improper personal benefit.

     TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.

     The undersigned incorporator hereinbefore named, for the purpose of forming
a corporation pursuant to the General Corporation Law of the State of Delaware,
does make this certificate, hereby declaring and certifying that this is her act
and deed and the facts stated herein are true and accordingly has hereunto set
her hand this 14th day of July, 1997.


                                        /s/ Kathleen M. Sablone
                                        ----------------------------------------
                                        Kathleen M. Sablone, Incorporator



                            CERTIFICATE OF AMENDMENT
                                       TO
                          CERTIFICATE OF INCORPORATION
                                       OF
                            LOCOMOTION HOLDINGS, INC.

     Locomotion Holdings, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:

     1. The amendment to the Corporation's Certificate of Incorporation set
forth below was duly authorized and adopted in accordance with the provisions of
Sections 228 and 242 of the General Corporation Law of the State of Delaware.

     2. Article First of the Corporation's Certificate of Incorporation is
amended to read as follows:

          "FIRST: The name of the corporation is Hallmark Investment Group, Inc.
(the "Corporation")."

     IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
executed this 8th day of August, 2003.

                                        LOCOMOTION HOLDINGS, INC.


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary



                       CERTIFICATE OF OWNERSHIP AND MERGER
                                       OF
                            LOCOMOTION THERAPY, INC.
                            (A DELAWARE CORPORATION)
                                      INTO
                         HALLMARK INVESTMENT GROUP, INC.
                            (A DELAWARE CORPORATION)

     Hallmark Investment Group, Inc., a corporation organized and existing under
Laws of the State of Delaware, does hereby certify:

     1. Hallmark Investment Group, Inc. (hereinafter sometimes referred to as
the "Corporation") is a business corporation of the State of Delaware.

     2. The Corporation is the owner of all of the outstanding shares of stock
of Locomotion Therapy, Inc., which is a business corporation of the State of
Delaware.

     3. The future effective date and time of this Certificate of Ownership and
Merger shall be August 14, 2003 at 11:10 a.m. Pacific Time (2:10 p.m. Eastern
Time) whereupon Locomotion Therapy, Inc. will merge into the Corporation.

     4. The following is a copy of the resolutions adopted by the Board of
Directors of the Corporation to merge Locomotion Therapy, Inc. into the
Corporation:

          "RESOLVED, that Locomotion Therapy, Inc. be merged into this
     Corporation, and that all of the estate, property, rights, privileges,
     powers, and franchises of Locomotion Therapy, Inc. be vested in and held
     and enjoyed by this Corporation as fully and entirely and without change or
     diminution as the same were before held and enjoyed by Locomotion Therapy,
     Inc. in its respective name.

          RESOLVED FURTHER, that this Corporation assume all of the obligations
     and liabilities of Locomotion Therapy, Inc.

          RESOLVED FURTHER, that this Corporation shall cause to be executed and
     filed and/or recorded the documents prescribed by the laws of the State of
     Delaware and by the laws of any other appropriate jurisdiction to effect
     the merger and will cause to be performed all necessary acts within the
     jurisdiction of organization of Locomotion Therapy, Inc. and of this
     Corporation and in any other appropriate jurisdiction to effect the
     merger."

                            [Signature Page Follows]



Executed on this 14th day of August, 2003.

                                        HALLMARK INVESTMENT GROUP, INC.


                                        By: /s/ Boyd Hendrickson
                                            ------------------------------------
                                            Boyd Hendrickson
                                            Chief Executive Officer



             CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
                             AND OF REGISTERED AGENT

It is hereby certified that:

          1. The name of the corporation (hereinafter called the "Corporation")
is Hallmark Investment Group, Inc.

          2. The registered office of the Corporation within the State of
Delaware is hereby changed to 9 East Loockerman Street, Suite 1B, City of Dover,
19901, County of Kent.

          3. The registered agent of the Corporation within the State of
Delaware is hereby changed to National Registered Agents, Inc., the business
office of which is identical with the registered office of the corporation as
hereby changed.

          4. The Corporation has authorized the changes hereinbefore set forth
by resolution of its Board of Directors.

Signed on: September 15, 2003.


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Signature of Officer


                                        Roland Rapp, Secretary
                                        ----------------------------------------
                                        Typed name and title of Officer

EX-3.4

                                                                     Exhibit 3.4

                                     BY-LAWS

                                       OF

                         HALLMARK INVESTMENT GROUP, INC.
                  (formerly known as Locomotion Holdings, Inc.)

                            (A Delaware Corporation)


                                  -------------

                                    ARTICLE I

                                  STOCKHOLDERS

            1. CERTIFICATES REPRESENTING STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board of Directors,
if any, or by the President or a Vice-President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the
corporation certifying the number of shares owned by him in the corporation. Any
and all signatures on any such certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.

                  Whenever the corporation shall be authorized to issue more
than one class of stock or more than one series of any class of stock, and
whenever the corporation shall issue any shares of its stock as partly paid
stock, the certificates representing shares of any such class or series or of
any such partly paid stock shall set forth thereon the statements prescribed by
the General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.

                  The corporation may issue a new certificate of stock in place
of any certificate theretofore issued by it, alleged to have been lost, stolen,
or destroyed, and the Board of Directors may require the owner of any lost,
stolen, or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against it on account of the alleged loss, theft, or
destruction of any such certificate or the issuance of any such new certificate.

            2. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such

fractions are determined, or (3) issue scrip or warrants in registered or bearer
form which shall entitle the holder to receive a certificate for a full share
upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional shares shall, but scrip or warrants shall not
unless otherwise provided therein, entitle the holder to exercise voting rights,
to receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.

            3. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes due thereon.

            4. RECORD DATE FOR STOCKHOLDERS. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the directors may fix, in advance, a record date, which
shall not be more than sixty days nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. For the purpose of
determining the stockholders entitled to express consent to corporate action in
writing without a meeting, the directors may fix a record date, which shall not
precede the date upon which the resolution fixing the record date is adopted by
the board of directors, and which shall not be more than 10 days after the date
upon which the resolution fixing the record date is adopted by the board of
directors. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; the record date for determining
stockholders entitled to express consent to corporate action in writing without
a meeting, when no prior action by the Board of Directors is necessary, shall be
the day on which the first written consent is expressed; and the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at any meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.


                                       2

            5. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of stock and any holder or holders of record of outstanding shares of
stock of any class upon which or upon whom the certificate of incorporation
confers such rights where there are two or more classes or series of shares of
stock or upon which or upon whom the General Corporation Law confers such right
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation.

            6.          STOCKHOLDER MEETINGS

            -TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.

            -PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of Delaware, as the directors may, from time
to time fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of
Delaware.

            -CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.

            -NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting), state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited,

                                       3

with postage thereon prepaid, in the United States mail. If a meeting is
adjourned to another time, not more than thirty days hence, and/or to another
place, and if an announcement of the adjourned time and/or place is made at the
meeting, it shall not be necessary to give notice of the adjourned meeting
unless the directors, after adjournment, fix a new record date for the adjourned
meeting. Notice need not be given to any stockholder who submits a written
waiver of notice signed by him before or after the time stated therein.
Attendance of a stockholder at a meeting of stockholders shall constitute a
waiver of notice of such meeting, except when the stockholder attends the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice.

            -STOCKHOLDER LIST. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the corporation, or to vote at any meeting of
stockholders.

            -CONDUCT OF MEETING. Meetings of the stockholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the Chairman of the meeting shall appoint a
secretary of the meeting.

            -PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a stockholder
is entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and, if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.


                                       4

            INSPECTORS. The directors, in advance of any meeting, may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding threat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question or matter determined by him or them and execute a
certificate of any fact found by him or them.

            -QUORUM. The holders of a majority of the outstanding shares of
stock shall constitute a quorum at a meeting of stockholders for the transaction
of any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.

            -VOTING. Each share of stock shall entitle the holder thereof to one
vote. In the election of directors, a plurality of the votes cast shall elect.
Any other action shall be authorized by a majority of the votes cast except
where the General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power, and except as may be otherwise
prescribed by the provisions of the certificate of incorporation and these
By-Laws. In the election of directors, and for any other action, voting need not
be by ballot.

            7. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the
General Corporation Law to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meetings
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.


                                       5

                                   ARTICLE II.

                                    DIRECTORS

            1. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed by or under the direction of the Board of Directors
of the corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.

            2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder,
a citizen of the United States, or a resident of the State of Delaware. The
property, affairs and business of the corporation shall be managed by its Board
of Directors. The number of directors may be fixed from time to time by action
of the stockholders or of the directors and may be increased or decreased by
action of the stockholders or of the directors.

            3. ELECTION AND TERM. The first Board of Directors, unless the
members thereof shall have been named in the certificate of incorporation, shall
be elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. In the
interim between annual meetings of stockholders or of special meetings of
stockholders called for the election of directors and/or for the removal of one
or more directors and for the filling of any vacancy in that connection, newly
created directorships and any vacancies in the Board of Directors, including
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.

            4. MEETINGS.

            -TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.

            -PLACE. Meetings shall be held at such place within or without the
State of Delaware as shall be fixed by the Board.

            -CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.

            -NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any

                                       6

other mode of notice of the time and place shall be given for special meetings
in sufficient time for the convenient assembly of the directors thereat. Notice
need not be given to any director or to any member of a committee of directors
who submits a written waiver of notice signed by him before or after the time
stated therein. Attendance of any such person at a meeting shall constitute a
waiver of notice of such meeting, except when he attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors need be specified in any written
waiver of notice.

            -QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board. The quorum and voting provisions herein stated
shall not be construed as conflicting with any provisions of the General
Corporation Law and these By-Laws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors.

            Any member or members of the Board of Directors or of any committee
designated by the Board, may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.

            -CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.

            5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
General Corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.

            6. COMMITTEES. Whenever its number consists of three or more, the
Board of Directors may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of two or more of
the directors of the corporation. The Board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any such committee or committees, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise the powers and

                                       7

authority of the Board of Directors in the management of the business and
affairs of the corporation with the exception of any authority the delegation of
which is prohibited by Section 141 of the General Corporation Law, and may
authorize the seal of the corporation to be affixed to all papers which may
require it.

            7. WRITTEN ACTION. Any action required or permitted to be taken at
any meeting of the Board of Directors or any committee thereof may be taken
without a meeting, without prior notice and without a vote if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee.

                                  ARTICLE III.

                                    OFFICERS

            The officers of the corporation shall consist of a President, a
Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the
Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an
Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the Chairman or Vice Chairman of
the Board, if any, need be a director. Any number of officers may be held by the
same person, as the directors may determine, except that no person may hold the
offices of President and Secretary simultaneously.

            Unless otherwise provided in the resolution choosing him, each
officer shall be chosen for a term which shall continue until the meeting of the
Board of Directors following the next annual meeting of stockholders and until
his successor shall have been chosen and qualified.

            All officers of the corporation shall have such authority and
perform such duties in the management and operation of the corporation as shall
be prescribed in the resolutions of the Board of Directors designating and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office except
to the extent that such resolutions may be inconsistent therewith. The Secretary
or an Assistant Secretary of the corporation shall record all of the proceedings
of all meetings and actions in writing of stockholders, directors, and
committees of directors, and shall exercise such additional authority and
perform such additional duties as the Board shall assign to him. Any officer may
be removed, with or without cause, by the Board of Directors. Any vacancy in any
office may be filled by the Board of Directors.

                                   ARTICLE IV.

                                 CORPORATE SEAL

            The corporate seal shall be in such form as the Board of Directors
shall prescribe.


                                       8

                                   ARTICLE V.

                                   FISCAL YEAR

            The fiscal year of the corporation shall be fixed, and shall be
subject to change, by the Board of Directors.

                                   ARTICLE VI.

                              CONTROL OVER BY-LAWS

            Subject to the provisions of the certificate of incorporation and
the provisions of the General Corporation Law, the power to amend, alter or
repeal these By-Laws and to adopt new By-Laws may be exercised by the Board of
Directors or by the stockholders.

            I HEREBY CERTIFY that the foregoing is a full, true and correct copy
of the By-Laws of Locomotion Holdings, Inc., a Delaware corporation, as in
effect on the date hereof.

            WITNESS my hand and seal of the corporation.

Dated:




                                    --------------------------------------------
                                    Secretary of Locomotion Holdings, Inc.





(SEAL)



                                       9

EX-3.5

                                                                     Exhibit 3.5

                          CERTIFICATE OF INCORPORATION
                                       OF
                             SUMMIT CARE CORPORATION

          The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:

          FIRST: The name of the corporation (hereinafter the "Corporation") is:

                             SUMMIT CARE CORPORATION

          SECOND: The name and address, including street, number, city and
county, of the registered agent of the Corporation in the State of Delaware are:

                    National Registered Agents, Inc.
                    160 Greentree Drive, Suite 101
                    Dover, Kent County, Delaware 19904

          THIRD: The nature of the business and the purposes to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.

          FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is one hundred (100) shares. The par value of each
such share is $0.01. All such shares are of one class and are shares of Common
Stock.

          FIFTH: The name and the mailing address of the incorporator are as
follows:

                    Roland Rapp
                    27442 Portola Parkway, Suite 200
                    Foothill Ranch, California 92610

          SIXTH: The Corporation is to have perpetual existence.

          SEVENTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of subsection
(b) of Section 102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.



          EIGHTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.

          NINTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
Article NINTH. In addition to the other powers expressly granted by statute, the
Board of Directors shall have the power to adopt, repeal, alter, amend and
rescind the Bylaws of the Corporation.

Dated this 9th day of June, 2005.


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp
                                        Incorporator

EX-3.6

                                                                     Exhibit 3.6

                                     BYLAWS

                                       OF

                            SUMMIT CARE CORPORATION,

                             A DELAWARE CORPORATION

                          (ADOPTED AS OF JUNE 13, 2005)



                                     BY-LAWS
                                       OF
                             SUMMIT CARE CORPORATION

                           ADOPTED AS OF JUNE 13, 2005

                                   ARTICLE I

                             IDENTIFICATION; OFFICES

SECTION 1.01. NAME. The name of the corporation is Summit Care Corporation. (the
"Corporation").

SECTION 1.02. PRINCIPAL AND BUSINESS OFFICES. The Corporation may have such
principal and other business offices, either within or outside of the state of
Delaware, as the Board of Directors may designate or as the Corporation's
business may require from time to time.

SECTION 1.03. REGISTERED AGENT AND OFFICE. The Corporation's registered agent
may be changed from time to time by or under the authority of the Board of
Directors. The address of the Corporation's registered agent may change from
time to time by or under the authority of the Board of Directors, or the
registered agent. The business office of the Corporation's registered agent
shall be identical to the registered office. The Corporation's registered office
may be but need not be identical with the Corporation's principal office in the
state of Delaware.

SECTION 1.04. PLACE OF KEEPING CORPORATE RECORDS. The records and documents
required by law to be kept by the Corporation permanently shall be kept at the
Corporation's principal office.

                                   ARTICLE II

                                  STOCKHOLDERS

SECTION 2.01. ANNUAL MEETING. An annual meeting of the stockholders shall be
held on such date as may be determined by resolution of the Board of Directors.
At each annual meeting, the stockholders shall elect directors to hold office
for the term provided in Section 3.01 of these By-Laws.

SECTION 2.02. SPECIAL MEETING. A special meeting of the stockholders may be
called by the President of the Corporation, the Board of Directors, or by such
other officers or persons as the Board of Directors may designate.



SECTION 2.03. PLACE OF STOCKHOLDER MEETINGS. The Board of Directors may
designate any place, either within or without the State of Delaware, as the
place of meeting for any annual meeting or for any special meeting. If no such
place is designated by the Board of Directors, the place of meeting will be the
principal business office of the Corporation.

SECTION 2.04. NOTICE OF MEETINGS. Unless waived as herein provided, whenever
stockholders are required or permitted to take any action at a meeting, written
notice of the meeting shall be given stating the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Such written notice shall be given not less than
ten (10) days nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at the meeting or in the event of a merger,
consolidation, share exchange, dissolution or sale, lease or exchange of all or
substantially all of the Corporation's property, business or assets not less
than twenty (20) days before the date of the meeting. If mailed, notice is given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at the stockholder's address as it appears on the records of the
Corporation.

When a meeting is adjourned to another time or place in accordance with Section
2.05 of these By-Laws, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting in which the adjournment is
taken. At the adjourned meeting the Corporation may conduct any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.

SECTION 2.05. QUORUM AND ADJOURNED MEETINGS. Unless otherwise provided by law or
the Corporation's Certificate of Incorporation, a majority of the shares
entitled to vote, present in person or represented by proxy, shall constitute a
quorum at a meeting of stockholders. If less than a majority of the shares
entitled to vote at a meeting of stockholders is present in person or
represented by proxy at such meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice. At any
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the original meeting. The stockholders
present at a meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of such number of stockholders as may leave less
than a quorum.

SECTION 2.06. FIXING OF RECORD DATE. (a) For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) days nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of


                                        2



stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

(b) For the purpose of determining stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is established by the Board of Directors, and which date
shall not be more than ten (10) days after the date on which the resolution
fixing the record date is adopted by the Board of Directors. If no record date
has been fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by law,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal office, or an
officer or agent of the Corporation having custody of the book in which the
proceedings of meetings of stockholders are recorded. Delivery to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by law, the
record date for determining stockholders' consent to corporate action in writing
without a meeting shall be the close of business on the day on which the Board
of Directors adopts the resolution taking such prior action.

(c) For the purpose of determining the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect to any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix the record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior to such
action. If no record date is fixed, the record date for determining the
stockholders for any such purpose shall be the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.

SECTION 2.07. VOTING LIST. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten (10) days before every meeting
of stockholders, a complete list of stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.

SECTION 2.08. VOTING. Unless otherwise provided by the Certificate of
Incorporation, each stockholder shall be entitled to one vote for each share of
capital stock held by each stockholder. In all matters other than the election
of directors, the affirmative vote of the majority of shares present in person
or represented by proxy at the meeting and entitled to vote on the subject
matter shall be the act of the stockholders. Directors shall be elected by
plurality of the votes of the shares present in person or represented by a proxy
at the meeting entitled to vote on the election of directors.


                                        3



SECTION 2.09. PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three (3) years from
its date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may remain irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the Corporation generally.

SECTION 2.10. RATIFICATION OF ACTS OF DIRECTORS AND OFFICERS. Except as
otherwise provided by law or by the Certificate of Incorporation of the
Corporation, any transaction or contract or act of the Corporation or of the
directors or the officers of the Corporation may be ratified by the affirmative
vote of the holders of the number of shares which would have been necessary to
approve such transaction, contract or act at a meeting of stockholders, or by
the written consent of stockholders in lieu of a meeting.

SECTION 2.11. INFORMAL ACTION OF STOCKHOLDERS. Any action required to be taken
at any annual or special meeting of stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. In the event that the action which is consented to is such
as would have required the filing of a certificate with any governmental body,
if such action had been voted on by stockholders at a meeting thereof, the
certificate filed shall state, in lieu of any statement required by law
concerning any vote of stockholders, that written consent had been given in
accordance with the provisions of Section 228 of the Delaware General
Corporation Law, and that written notice has been given as provided in such
section.

SECTION 2.12. ORGANIZATION. Such person as the Board of Directors may designate
or, in the absence of such a designation, the president of the Corporation or,
in his or her absence, such person as may be chosen by the holders of a majority
of the shares entitled to vote who are present, in person or by proxy, shall
call to order any meeting of the stockholders and act as chairman of such
meeting. In the absence of the secretary of the Corporation, the chairman of the
meeting shall appoint a person to serve as secretary at the meeting.

                                   ARTICLE III

                                    DIRECTORS

SECTION 3.01. NUMBER AND TENURE OF DIRECTORS. The number of directors of the
Corporation shall consist of not less than one (1) nor more than five (5)
members, as shall be determined from time to time by resolution of the Board.
The initial Board shall consist of three (3) members. Each director shall hold
office until such director's successor is elected and


                                        4



qualified or until such director's earlier resignation or removal. Any director
may resign at any time upon written notice to the Corporation.

SECTION 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in these
By-Laws, directors shall be elected at the annual meeting of stockholders.
Directors need not be residents of the State of Delaware. Elections of directors
need not be by written ballet.

SECTION 3.03. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the Chairman of the Board, the President or at
least one-third of the number of directors constituting the whole board. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place, either within or without the State of Delaware, as the place
for holding any special meeting of the Board of Directors called by them.

SECTION 3.04. NOTICE OF SPECIAL MEETINGS OF THE BOARD OF DIRECTORS. Notice of
any special meeting of the Board of Directors shall be given at least two (2)
days previous thereto by written notice to each director at his or her address.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States Mail so addressed, with first-class postage thereon prepaid. If
sent by any other means (including facsimile, courier, or express mail, etc.),
such notice shall be deemed to be delivered when actually delivered to the home
or business address of the director.

SECTION 3.05. QUORUM. A majority of the total number of directors as provided in
Section 3.01 of these By-Laws shall constitute a quorum for the transaction of
business. If less than a majority of the directors are present at a meeting of
the Board of Directors, a majority of the directors present may adjourn the
meeting from time to time without further notice.

SECTION 3.06. VOTING. The vote of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors,
unless the Delaware General Corporation Law or the Certificate of Incorporation
requires a vote of a greater number.

SECTION 3.07. VACANCIES. Vacancies in the Board of Directors may be filled by a
majority vote of the Board of Directors or by an election either at an annual
meeting or at a special meeting of the stockholders called for that purpose. Any
directors elected by the stockholders to fill a vacancy shall hold office for
the balance of the term for which he or she was elected. A director appointed by
the Board of Directors to fill a vacancy shall serve until the next meeting of
stockholders at which directors are elected.

SECTION 3.08. REMOVAL OF DIRECTORS. A director, or the entire Board of
Directors, may be removed, with or without cause, by the holders of a majority
of the shares then entitled to vote at an election of directors; provided,
however, that if cumulative voting obtains and less than the entire Board of
Directors is to be removed, no director may be removed without cause if the
votes cast against such director's removal would be sufficient to elect him if
then cumulatively voted at an election of the entire Board of Directors.

SECTION 3.09. INFORMAL ACTION OF DIRECTORS. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all


                                        5



members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.

SECTION 3.10. PARTICIPATION BY CONFERENCE TELEPHONE. Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of the Board of Directors, or committee thereof, by means of conference
telephone or similar communications equipment as long as all persons
participating in the meeting can speak with and hear each other, and
participation by a director pursuant to this Section 3.10 shall constitute
presence in person at such meeting.

                                   ARTICLE IV

                                WAIVER OF NOTICE

SECTION 4.01. WRITTEN WAIVER OF NOTICE. A written waiver of any required notice,
signed by the person entitled to notice, whether before or after the date stated
therein, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of
stockholders, directors or members of a committee of directors need be specified
in any written waiver of notice.

SECTION 4.02. ATTENDANCE AS WAIVER OF NOTICE. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, and objects at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

                                   ARTICLE V

                                   COMMITTEES

SECTION 5. GENERAL PROVISIONS. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member at any meeting of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it, but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease, or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending the By-Laws of the Corporation, and, unless the
resolution so provides, no such committee shall have the power or authority to
declare a dividend, to authorize the issuance of stock or to adopt a


                                        6



certificate of ownership and merger, pursuant to Section 253 of the Delaware
General Corporation Law.

                                   ARTICLE VI

                                    OFFICERS

SECTION 6.01. GENERAL PROVISIONS. The Board of Directors shall elect a President
and a Secretary of the Corporation. The Board of Directors may also elect a
Chairman of the Board, one or more Vice Chairmen of the Board, one or more Vice
Presidents, a Treasurer, one or more Assistant Secretaries and Assistant
Treasurers and such additional officers as the Board of Directors may deem
necessary or appropriate from time to time. Any two or more offices may be held
by the same person. The officers elected by the Board of Directors shall have
such duties as are hereafter described and such additional duties as the Board
of Directors may from time to time prescribe.

SECTION 6.02. ELECTION AND TERM OF OFFICE. Each officer of the Corporation shall
be elected by the Board of Directors and shall hold office until the earliest of
the following events: (i) he is removed pursuant to Section 6.03 of these
By-Laws, (ii) his successor has been duly elected and qualified, or (iii) his
death or resignation. New offices of the Corporation may be created and filled
and vacancies in offices may be filled at any time, at a meeting or by the
written consent of the Board of Directors. Election or appointment of an officer
or agent shall not of itself create contract rights.

SECTION 6.03. REMOVAL OF OFFICERS. Any officer or agent elected or appointed by
the Board of Directors may be removed by the Board of Directors whenever, in its
judgment, the best interests of the Corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person(s) so removed.

SECTION 6.04. THE CHIEF EXECUTIVE OFFICER. The Board of Directors shall
designate whether the Chairman of the Board, if one shall have been chosen, or
the President shall be the Chief Executive Officer of the Corporation. If a
Chairman of the Board has not been chosen, or if one has been chosen but not
designated Chief Executive Officer, then the President shall be the Chief
Executive Officer of the Corporation. The Chief Executive Officer shall be the
principal executive officer of the Corporation and shall in general supervise
and control all of the business and affairs of the Corporation, unless otherwise
provided by the Board of Directors. The Chief Executive Officer shall preside at
all meetings of the stockholders and of the Board of Directors and shall see
that orders and resolutions of the Board of Directors are carried into effect.
The Chief Executive Officer may sign bonds, mortgages, certificates for shares
and all other contracts and documents whether or not under the seal of the
Corporation except in cases where the signing and execution thereof shall be
expressly delegated by law, by the Board of Directors or by these By-Laws to
some other officer or agent of the Corporation. The Chief Executive Officer
shall have general powers of supervision and shall be the final arbiter of all
differences between officers of the Corporation and his decision as to any
matter affecting the Corporation shall be final and binding as between the
officers of the Corporation subject only to the Board of Directors.


                                        7



SECTION 6.05. THE PRESIDENT. In the absence of the Chief Executive Officer or in
the event of his inability or refusal to act, if the Chairman of the Board has
been designated Chief Executive Officer, the President shall perform the duties
of the Chief Executive Officer, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the Chief Executive Officer. At all
other times the President shall have the active management of the business of
the Corporation under the general supervision of the Chief Executive Officer.
The President shall have concurrent power with the Chief Executive Officer to
sign bonds, mortgages, certificates for shares and other contracts and
documents, whether or not under the seal of the Corporation except in cases
where the signing and execution thereof shall be expressly delegated by law, by
the Board of Directors, or by these By-Laws to some other officer or agent of
the Corporation. In general, the President shall perform all duties incident to
the office of president and such other duties as the Chief Executive Officer or
the Board of Directors may from time to time prescribe.

SECTION 6.06. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
chosen, shall be chosen from among the members of the board. If the Chairman of
the Board has not been designated Chief Executive Officer, the Chairman of the
Board shall perform such duties as may be assigned to the Chairman of the Board
by the Chief Executive Officer or by the Board of Directors.

SECTION 6.07. VICE CHAIRMAN OF THE BOARD. In the absence of the Chief Executive
Officer or in the event of his inability or refusal to act, if the Chairman of
the Board has been designated Chief Executive Officer, the Vice Chairman, or if
there be more than one, the Vice Chairmen, in the order determined by the Board
of Directors, shall perform the duties of the Chief Executive Officer, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the Chief Executive Officer. At all other times, the Vice Chairman or Vice
Chairmen shall perform such duties and have such powers as the Chief Executive
Officer or the Board of Directors may from time to time prescribe.

SECTION 6.08. THE VICE PRESIDENT. In the absence of the President or in the
event of his inability or refusal to act, the Vice President (or in the event
there be more than one Vice President, the Executive Vice President and then the
other Vice President or Vice Presidents in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Vice Presidents
shall perform such other duties and have such other powers as the Chief
Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.09. THE SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or the Chief Executive Officer, under whose supervision
he shall be. The Secretary shall have custody of the corporate seal of the
Corporation and the Secretary, or an Assistant Secretary, shall have authority
to affix the same to any instrument requiring it and when so affixed, it may


                                        8



be attested by his signature or by the signature of such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature.

SECTION 6.10. THE ASSISTANT SECRETARY. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Chief Executive Officer or the Board of Directors may from time to time
prescribe.

SECTION 6.11. THE TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond (which shall be renewed every six (6) years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the restoration
to the Corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.

SECTION 6.12. THE ASSISTANT TREASURER. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Chief Executive Officer or the Board of Directors may from time to time
prescribe.

SECTION 6.13. OTHER OFFICERS, ASSISTANT OFFICERS AND AGENTS. Officers, Assistant
Officers and Agents, if any, other than those whose duties are provided for in
these By-Laws, shall have such authority and perform such duties as may from
time to time be prescribed by resolution of the board of directors.

SECTION 6.14. ABSENCE OF OFFICERS. In the absence of any officer of the
Corporation, or for any other reason the Board of Directors may deem sufficient,
the Board of Directors may delegate the powers or duties, or any of such powers
or duties, of any officers or officer to any other officer or to any director.

SECTION 6.15. COMPENSATION. The Board of Directors shall have the authority to
establish reasonable compensation of all officers for services to the
Corporation.


                                        9



                                  ARTICLE VII

                                INDEMNIFICATION

SECTION 7.01. RIGHT TO INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify and hold harmless, to the fullest extent permitted
by applicable law as it presently exists or may hereafter be amended, any person
(a "Covered Person") who was or is made or is threatened to be made a party or
is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact that such person, or a person for whom such person is the legal
representative, is or was a director or officer of the Corporation or, while a
director or officer of the Corporation, is or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation or
of a partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans, against all liability
and loss suffered and expenses (including attorneys' fees) reason-ably incurred
by such Covered Person in such proceeding. Notwithstanding the preceding
sentence, except as otherwise provided in Section 7.03, the Corporation shall be
required to indemnify a Covered Person in connection with a proceeding (or part
thereof) commenced by such Covered Person only if the commencement of such
proceeding (or part thereof) by the Covered Person was authorized in advance by
the Board of Directors.

SECTION 7.02. PREPAYMENT OF EXPENSES OF DIRECTORS AND OFFICERS. The Corporation
shall pay the expenses (including attorneys' fees) incurred by a Covered Person
in defending any proceeding in advance of its final disposition, provided,
however, that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the Covered Person to repay all amounts advanced if
it should be ultimately determined that the Covered Person is not entitled to be
indemnified under this Article VII or otherwise.

SECTION 7.03. CLAIMS BY DIRECTORS AND OFFICERS. If a claim for indemnification
or advancement of expenses under this Article VII is not paid in full within
thirty days after a written claim therefor by the Covered Person has been
received by the Corporation, the Covered Person may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the Covered Person is not
entitled to the requested indemnification or advancement of expenses under
applicable law.

SECTION 7.04. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may
indemnify and advance expenses to any person who was or is made or is threatened
to be made or is otherwise involved in any proceeding by reason of the fact that
such person, or a person for whom such person is the legal representative, is or
was an employee or agent of the Corporation or, while an employee or agent of
the Corporation, is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans, against all liability and loss suffered and
expenses (including attorney's fees) reasonably incurred by such person in
connection with such proceeding. The ultimate determination of entitlement to
indemnification of persons who are non-director or officer employees or agents
shall be made in such manner as is determined by the Board of Directors in


                                       10



its sole discretion. Notwithstanding the foregoing sentence, the Corporation
shall not be required to indemnify a person in connection with a proceeding
initiated by such person if the proceeding was not authorized in advance by the
Board of Directors.

SECTION 7.05. ADVANCEMENT OF EXPENSES OF EMPLOYEES AND AGENTS. The Corporation
may pay the expenses (including attorney's fees) incurred by an employee or
agent in defending any proceeding in advance of its final disposition on such
terms and conditions as may be determined by the Board of Directors.

SECTION 7.06. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this Article VII shall not be exclusive of any other rights which such person
may have or hereafter acquire under any statute, provision of the certificate of
incorporation, these by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.

SECTION 7.07. OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director, officer
or employee of another Corporation, partnership, joint venture, trust,
organization or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other Corporation, partnership, joint
venture, trust, organization or other enterprise.

SECTION 7.08. INSURANCE. The Board of Directors may, to the full extent
permitted by applicable law as it presently exists, or may hereafter be amended
from time to time, authorize an appropriate officer or officers to purchase and
maintain at the Corporation's expense insurance: (a) to indemnify the
Corporation for any obligation which it incurs as a result of the
indemnification of directors, officers and employees under the provisions of
this Article VII; and (b) to indemnify or insure directors, officers and
employees against liability in instances in which they may not otherwise be
indemnified by the Corporation under the provisions of this Article VII.

SECTION 7.09. AMENDMENT OR REPEAL. Any repeal or modification of the foregoing
provisions of this Article VII shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification. The rights provided hereunder
shall inure to the benefit of any Covered Person and such person's heirs,
executors and administrators.

                                  ARTICLE VIII

                             CERTIFICATES FOR SHARES

SECTION 8.01. CERTIFICATES OF SHARES. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate signed by, or in the name of the Corporation by
the Chairman or Vice Chairman of the Board of Directors, Chief Executive
Officer, or the President or Vice President, and by the Treasurer or an
Assistant


                                       11



Treasurer, or the Secretary or an Assistant Secretary of the Corporation
representing the number of shares registered in certificate form. Any or all the
signatures on the certificate may be a facsimile.

SECTION 8.02. SIGNATURES OF FORMER OFFICER, TRANSFER AGENT OR REGISTRAR. In case
any officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such person or entity
were such officer, transfer agent or registrar at the date of issue.

SECTION 8.03. TRANSFER OF SHARES. Transfers of shares of the Corporation shall
be made only on the books of the Corporation by the holder of record thereof or
by his legal representative, who shall furnish proper evidence of authority to
transfer, or by his or her attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, and on surrender
for cancellation of certificate for such shares. Prior to due presentment of a
certificate for shares for registration of transfer, the Corporation may treat a
registered owner of such shares as the person exclusively entitled to vote, to
receive notifications and otherwise have and exercise all of the right and
powers of an owner of shares.

SECTION 8.04. LOST, DESTROYED OR STOLEN CERTIFICATES. Whenever a certificate
representing shares of the Corporation has been lost, destroyed or stolen, the
holder thereof may file in the office of the Corporation an affidavit setting
forth, to the best of his knowledge and belief, the time, place, and
circumstance of such loss, destruction or theft together with a statement of
indemnity sufficient in the opinion of the Board of Directors to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss of any such certificate. Thereupon the Board may cause to be issued
to such person or such person's legal representative a new certificate or a
duplicate of the certificate alleged to have been lost, destroyed or stolen. In
the exercise of its discretion, the Board of Directors may waive the
indemnification requirements provided herein.

                                   ARTICLE IX

                                    DIVIDENDS

SECTION 9. DIVIDENDS. The Board of Directors of the Corporation may declare and
pay dividends upon the shares of the Corporation's capital stock in any form
determined by the Board of Directors, in the manner and upon the terms and
conditions provided by law.

                                   ARTICLE X

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 10.01. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.


                                       12



SECTION 10.02. LOANS. No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.

SECTION 10.03. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by one or more officers or agents of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

SECTION 10.04. DEPOSITS. The funds of the Corporation may be deposited or
invested in such bank account, in such investments or with such other
depositaries as determined by the Board of Directors.

                                   ARTICLE XI

                                   AMENDMENTS

SECTION 11. AMENDMENTS. These By-laws may be adopted, amended or repealed by
either the Corporation's Board of Directors or its stockholders.


                                       13



                                   ATTESTATION

          The undersigned, being the Secretary of Summit Care Corporation, does
hereby certify the foregoing to be By-Laws of the Corporation.

                                        SUMMIT CARE CORPORATION


                                        /s/ Roland G. Rapp
                                        ----------------------------------------
                                        Roland G. Rapp
                                        Secretary

EX-3.7

                                                                     Exhibit 3.7


                          CERTIFICATE OF INCORPORATION
                                       OF
                           SUMMIT CARE PHARMACY, INC.

          The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:

          FIRST: The name of the corporation (hereinafter the "Corporation") is:

                           SUMMIT CARE PHARMACY, INC.

          SECOND: The name and address, including street, number, city and
county, of the registered agent of the Corporation in the State of Delaware are:

                    National Registered Agents, Inc.
                    160 Greentree Drive, Suite 101
                    Dover, Kent County, Delaware 19904

          THIRD: The nature of the business and the purposes to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.

          FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is one hundred (100) shares. The par value of each
such share is $0.01. All such shares are of one class and are shares of Common
Stock.

          FIFTH: The name and the mailing address of the incorporator are as
follows:

                    Roland Rapp
                    27442 Portola Parkway, Suite 200
                    Foothill Ranch, California 92610

          SIXTH: The Corporation is to have perpetual existence.

          SEVENTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of subsection
(b) of Section 102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.



          EIGHTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such person.

          NINTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
Article NINTH. In addition to the other powers expressly granted by statute, the
Board of Directors shall have the power to adopt, repeal, alter, amend and
rescind the Bylaws of the Corporation.

Dated this 9th day of June, 2005.


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp
                                        Incorporator

EX-3.8

                                                                     Exhibit 3.8

                                     BYLAWS

                                       OF

                           SUMMIT CARE PHARMACY, INC.,

                             A DELAWARE CORPORATION

                          (ADOPTED AS OF JUNE 13, 2005)



                                     BY-LAWS
                                       OF
                           SUMMIT CARE PHARMACY, INC.

                           ADOPTED AS OF JUNE 13, 2005

                                    ARTICLE I

                             IDENTIFICATION; OFFICES

SECTION 1.01. NAME. The name of the corporation is Summit Care Pharmacy, Inc.
(the "Corporation").

SECTION 1.02. PRINCIPAL AND BUSINESS OFFICES. The Corporation may have such
principal and other business offices, either within or outside of the state of
Delaware, as the Board of Directors may designate or as the Corporation's
business may require from time to time.

SECTION 1.03. REGISTERED AGENT AND OFFICE. The Corporation's registered agent
may be changed from time to time by or under the authority of the Board of
Directors. The address of the Corporation's registered agent may change from
time to time by or under the authority of the Board of Directors, or the
registered agent. The business office of the Corporation's registered agent
shall be identical to the registered office. The Corporation's registered office
may be but need not be identical with the Corporation's principal office in the
state of Delaware.

SECTION 1.04. PLACE OF KEEPING CORPORATE RECORDS. The records and documents
required by law to be kept by the Corporation permanently shall be kept at the
Corporation's principal office.

                                   ARTICLE II

                                  STOCKHOLDERS

SECTION 2.01. ANNUAL MEETING. An annual meeting of the stockholders shall be
held on such date as may be determined by resolution of the Board of Directors.
At each annual meeting, the stockholders shall elect directors to hold office
for the term provided in Section 3.01 of these By-Laws.

SECTION 2.02. SPECIAL MEETING. A special meeting of the stockholders may be
called by the President of the Corporation, the Board of Directors, or by such
other officers or persons as the Board of Directors may designate.



SECTION 2.03. PLACE OF STOCKHOLDER MEETINGS. The Board of Directors may
designate any place, either within or without the State of Delaware, as the
place of meeting for any annual meeting or for any special meeting. If no such
place is designated by the Board of Directors, the place of meeting will be the
principal business office of the Corporation.

SECTION 2.04. NOTICE OF MEETINGS. Unless waived as herein provided, whenever
stockholders are required or permitted to take any action at a meeting, written
notice of the meeting shall be given stating the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Such written notice shall be given not less than
ten (10) days nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at the meeting or in the event of a merger,
consolidation, share exchange, dissolution or sale, lease or exchange of all or
substantially all of the Corporation's property, business or assets not less
than twenty (20) days before the date of the meeting. If mailed, notice is given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at the stockholder's address as it appears on the records of the
Corporation.

When a meeting is adjourned to another time or place in accordance with Section
2.05 of these By-Laws, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting in which the adjournment is
taken. At the adjourned meeting the Corporation may conduct any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.

SECTION 2.05. QUORUM AND ADJOURNED MEETINGS. Unless otherwise provided by law or
the Corporation's Certificate of Incorporation, a majority of the shares
entitled to vote, present in person or represented by proxy, shall constitute a
quorum at a meeting of stockholders. If less than a majority of the shares
entitled to vote at a meeting of stockholders is present in person or
represented by proxy at such meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice. At any
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the original meeting. The stockholders
present at a meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of such number of stockholders as may leave less
than a quorum.

SECTION 2.06. FIXING OF RECORD DATE. (a) For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) days nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of


                                        2



stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

(b) For the purpose of determining stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is established by the Board of Directors, and which date
shall not be more than ten (10) days after the date on which the resolution
fixing the record date is adopted by the Board of Directors. If no record date
has been fixed by the Board of Directors, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by law,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal office, or an
officer or agent of the Corporation having custody of the book in which the
proceedings of meetings of stockholders are recorded. Delivery to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by law, the
record date for determining stockholders' consent to corporate action in writing
without a meeting shall be the close of business on the day on which the Board
of Directors adopts the resolution taking such prior action.

(c) For the purpose of determining the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect to any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix the record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior to such
action. If no record date is fixed, the record date for determining the
stockholders for any such purpose shall be the close of business on the day on
which the Board of Directors adopts the resolution relating thereto.

SECTION 2.07. VOTING LIST. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten (10) days before every meeting
of stockholders, a complete list of stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.

SECTION 2.08. VOTING. Unless otherwise provided by the Certificate of
Incorporation, each stockholder shall be entitled to one vote for each share of
capital stock held by each stockholder. In all matters other than the election
of directors, the affirmative vote of the majority of shares present in person
or represented by proxy at the meeting and entitled to vote on the subject
matter shall be the act of the stockholders. Directors shall be elected by
plurality of the votes of the shares present in person or represented by a proxy
at the meeting entitled to vote on the election of directors.


                                        3



SECTION 2.09. PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three (3) years from
its date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may remain irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the Corporation generally.

SECTION 2.10. RATIFICATION OF ACTS OF DIRECTORS AND OFFICERS. Except as
otherwise provided by law or by the Certificate of Incorporation of the
Corporation, any transaction or contract or act of the Corporation or of the
directors or the officers of the Corporation may be ratified by the affirmative
vote of the holders of the number of shares which would have been necessary to
approve such transaction, contract or act at a meeting of stockholders, or by
the written consent of stockholders in lieu of a meeting.

SECTION 2.11. INFORMAL ACTION OF STOCKHOLDERS. Any action required to be taken
at any annual or special meeting of stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. In the event that the action which is consented to is such
as would have required the filing of a certificate with any governmental body,
if such action had been voted on by stockholders at a meeting thereof, the
certificate filed shall state, in lieu of any statement required by law
concerning any vote of stockholders, that written consent had been given in
accordance with the provisions of Section 228 of the Delaware General
Corporation Law, and that written notice has been given as provided in such
section.

SECTION 2.12. ORGANIZATION. Such person as the Board of Directors may designate
or, in the absence of such a designation, the president of the Corporation or,
in his or her absence, such person as may be chosen by the holders of a majority
of the shares entitled to vote who are present, in person or by proxy, shall
call to order any meeting of the stockholders and act as chairman of such
meeting. In the absence of the secretary of the Corporation, the chairman of the
meeting shall appoint a person to serve as secretary at the meeting.

                                   ARTICLE III

                                    DIRECTORS

SECTION 3.01. NUMBER AND TENURE OF DIRECTORS. The number of directors of the
Corporation shall consist of not less than one (1) nor more than five (5)
members, as shall be determined from time to time by resolution of the Board.
The initial Board shall consist of three (3) members. Each director shall hold
office until such director's successor is elected and


                                        4



qualified or until such director's earlier resignation or removal. Any director
may resign at any time upon written notice to the Corporation.

SECTION 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in these
By-Laws, directors shall be elected at the annual meeting of stockholders.
Directors need not be residents of the State of Delaware. Elections of directors
need not be by written ballet.

SECTION 3.03. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the Chairman of the Board, the President or at
least one-third of the number of directors constituting the whole board. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place, either within or without the State of Delaware, as the place
for holding any special meeting of the Board of Directors called by them.

SECTION 3.04. NOTICE OF SPECIAL MEETINGS OF THE BOARD OF DIRECTORS. Notice of
any special meeting of the Board of Directors shall be given at least two (2)
days previous thereto by written notice to each director at his or her address.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States Mail so addressed, with first-class postage thereon prepaid. If
sent by any other means (including facsimile, courier, or express mail, etc.),
such notice shall be deemed to be delivered when actually delivered to the home
or business address of the director.

SECTION 3.05. QUORUM. A majority of the total number of directors as provided in
Section 3.01 of these By-Laws shall constitute a quorum for the transaction of
business. If less than a majority of the directors are present at a meeting of
the Board of Directors, a majority of the directors present may adjourn the
meeting from time to time without further notice.

SECTION 3.06. VOTING. The vote of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors,
unless the Delaware General Corporation Law or the Certificate of Incorporation
requires a vote of a greater number.

SECTION 3.07. VACANCIES. Vacancies in the Board of Directors may be filled by a
majority vote of the Board of Directors or by an election either at an annual
meeting or at a special meeting of the stockholders called for that purpose. Any
directors elected by the stockholders to fill a vacancy shall hold office for
the balance of the term for which he or she was elected. A director appointed by
the Board of Directors to fill a vacancy shall serve until the next meeting of
stockholders at which directors are elected.

SECTION 3.08. REMOVAL OF DIRECTORS. A director, or the entire Board of
Directors, may be removed, with or without cause, by the holders of a majority
of the shares then entitled to vote at an election of directors; provided,
however, that if cumulative voting obtains and less than the entire Board of
Directors is to be removed, no director may be removed without cause if the
votes cast against such director's removal would be sufficient to elect him if
then cumulatively voted at an election of the entire Board of Directors.

SECTION 3.09. INFORMAL ACTION OF DIRECTORS. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all


                                        5



members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.

SECTION 3.10. PARTICIPATION BY CONFERENCE TELEPHONE. Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of the Board of Directors, or committee thereof, by means of conference
telephone or similar communications equipment as long as all persons
participating in the meeting can speak with and hear each other, and
participation by a director pursuant to this Section 3.10 shall constitute
presence in person at such meeting.

                                   ARTICLE IV

                                WAIVER OF NOTICE

SECTION 4.01. WRITTEN WAIVER OF NOTICE. A written waiver of any required notice,
signed by the person entitled to notice, whether before or after the date stated
therein, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of
stockholders, directors or members of a committee of directors need be specified
in any written waiver of notice.

SECTION 4.02. ATTENDANCE AS WAIVER OF NOTICE. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, and objects at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

                                    ARTICLE V

                                   COMMITTEES

SECTION 5. GENERAL PROVISIONS. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member at any meeting of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it, but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease, or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, or amending the By-Laws of the Corporation, and, unless the
resolution so provides, no such committee shall have the power or authority to
declare a dividend, to authorize the issuance of stock or to adopt a


                                        6



certificate of ownership and merger, pursuant to Section 253 of the Delaware
General Corporation Law.

                                   ARTICLE VI

                                    OFFICERS

SECTION 6.01. GENERAL PROVISIONS. The Board of Directors shall elect a President
and a Secretary of the Corporation. The Board of Directors may also elect a
Chairman of the Board, one or more Vice Chairmen of the Board, one or more Vice
Presidents, a Treasurer, one or more Assistant Secretaries and Assistant
Treasurers and such additional officers as the Board of Directors may deem
necessary or appropriate from time to time. Any two or more offices may be held
by the same person. The officers elected by the Board of Directors shall have
such duties as are hereafter described and such additional duties as the Board
of Directors may from time to time prescribe.

SECTION 6.02. ELECTION AND TERM OF OFFICE. Each officer of the Corporation shall
be elected by the Board of Directors and shall hold office until the earliest of
the following events: (i) he is removed pursuant to Section 6.03 of these
By-Laws, (ii) his successor has been duly elected and qualified, or (iii) his
death or resignation. New offices of the Corporation may be created and filled
and vacancies in offices may be filled at any time, at a meeting or by the
written consent of the Board of Directors. Election or appointment of an officer
or agent shall not of itself create contract rights.

SECTION 6.03. REMOVAL OF OFFICERS. Any officer or agent elected or appointed by
the Board of Directors may be removed by the Board of Directors whenever, in its
judgment, the best interests of the Corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person(s) so removed.

SECTION 6.04. THE CHIEF EXECUTIVE OFFICER. The Board of Directors shall
designate whether the Chairman of the Board, if one shall have been chosen, or
the President shall be the Chief Executive Officer of the Corporation. If a
Chairman of the Board has not been chosen, or if one has been chosen but not
designated Chief Executive Officer, then the President shall be the Chief
Executive Officer of the Corporation. The Chief Executive Officer shall be the
principal executive officer of the Corporation and shall in general supervise
and control all of the business and affairs of the Corporation, unless otherwise
provided by the Board of Directors. The Chief Executive Officer shall preside at
all meetings of the stockholders and of the Board of Directors and shall see
that orders and resolutions of the Board of Directors are carried into effect.
The Chief Executive Officer may sign bonds, mortgages, certificates for shares
and all other contracts and documents whether or not under the seal of the
Corporation except in cases where the signing and execution thereof shall be
expressly delegated by law, by the Board of Directors or by these By-Laws to
some other officer or agent of the Corporation. The Chief Executive Officer
shall have general powers of supervision and shall be the final arbiter of all
differences between officers of the Corporation and his decision as to any
matter affecting the Corporation shall be final and binding as between the
officers of the Corporation subject only to the Board of Directors.


                                        7



SECTION 6.05. THE PRESIDENT. In the absence of the Chief Executive Officer or in
the event of his inability or refusal to act, if the Chairman of the Board has
been designated Chief Executive Officer, the President shall perform the duties
of the Chief Executive Officer, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the Chief Executive Officer. At all
other times the President shall have the active management of the business of
the Corporation under the general supervision of the Chief Executive Officer.
The President shall have concurrent power with the Chief Executive Officer to
sign bonds, mortgages, certificates for shares and other contracts and
documents, whether or not under the seal of the Corporation except in cases
where the signing and execution thereof shall be expressly delegated by law, by
the Board of Directors, or by these By-Laws to some other officer or agent of
the Corporation. In general, the President shall perform all duties incident to
the office of president and such other duties as the Chief Executive Officer or
the Board of Directors may from time to time prescribe.

SECTION 6.06. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
chosen, shall be chosen from among the members of the board. If the Chairman of
the Board has not been designated Chief Executive Officer, the Chairman of the
Board shall perform such duties as may be assigned to the Chairman of the Board
by the Chief Executive Officer or by the Board of Directors.

SECTION 6.07. VICE CHAIRMAN OF THE BOARD. In the absence of the Chief Executive
Officer or in the event of his inability or refusal to act, if the Chairman of
the Board has been designated Chief Executive Officer, the Vice Chairman, or if
there be more than one, the Vice Chairmen, in the order determined by the Board
of Directors, shall perform the duties of the Chief Executive Officer, and when
so acting shall have all the powers of and be subject to all the restrictions
upon the Chief Executive Officer. At all other times, the Vice Chairman or Vice
Chairmen shall perform such duties and have such powers as the Chief Executive
Officer or the Board of Directors may from time to time prescribe.

SECTION 6.08. THE VICE PRESIDENT. In the absence of the President or in the
event of his inability or refusal to act, the Vice President (or in the event
there be more than one Vice President, the Executive Vice President and then the
other Vice President or Vice Presidents in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Vice Presidents
shall perform such other duties and have such other powers as the Chief
Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 6.09. THE SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or the Chief Executive Officer, under whose supervision
he shall be. The Secretary shall have custody of the corporate seal of the
Corporation and the Secretary, or an Assistant Secretary, shall have authority
to affix the same to any instrument requiring it and when so affixed, it may


                                        8



be attested by his signature or by the signature of such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature.

SECTION 6.10. THE ASSISTANT SECRETARY. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Chief Executive Officer or the Board of Directors may from time to time
prescribe.

SECTION 6.11. THE TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond (which shall be renewed every six (6) years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the restoration
to the Corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.

SECTION 6.12. THE ASSISTANT TREASURER. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Chief Executive Officer or the Board of Directors may from time to time
prescribe.

SECTION 6.13. OTHER OFFICERS, ASSISTANT OFFICERS AND AGENTS. Officers, Assistant
Officers and Agents, if any, other than those whose duties are provided for in
these By-Laws, shall have such authority and perform such duties as may from
time to time be prescribed by resolution of the board of directors.

SECTION 6.14. ABSENCE OF OFFICERS. In the absence of any officer of the
Corporation, or for any other reason the Board of Directors may deem sufficient,
the Board of Directors may delegate the powers or duties, or any of such powers
or duties, of any officers or officer to any other officer or to any director.

SECTION 6.15. COMPENSATION. The Board of Directors shall have the authority to
establish reasonable compensation of all officers for services to the
Corporation.


                                        9



                                   ARTICLE VII

                                 INDEMNIFICATION

SECTION 7.01. RIGHT TO INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation shall indemnify and hold harmless, to the fullest extent permitted
by applicable law as it presently exists or may hereafter be amended, any person
(a "Covered Person") who was or is made or is threatened to be made a party or
is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding"), by reason of the
fact that such person, or a person for whom such person is the legal
representative, is or was a director or officer of the Corporation or, while a
director or officer of the Corporation, is or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation or
of a partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans, against all liability
and loss suffered and expenses (including attorneys' fees) reason-ably incurred
by such Covered Person in such proceeding. Notwithstanding the preceding
sentence, except as otherwise provided in Section 7.03, the Corporation shall be
required to indemnify a Covered Person in connection with a proceeding (or part
thereof) commenced by such Covered Person only if the commencement of such
proceeding (or part thereof) by the Covered Person was authorized in advance by
the Board of Directors.

SECTION 7.02. PREPAYMENT OF EXPENSES OF DIRECTORS AND OFFICERS. The Corporation
shall pay the expenses (including attorneys' fees) incurred by a Covered Person
in defending any proceeding in advance of its final disposition, provided,
however, that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the Covered Person to repay all amounts advanced if
it should be ultimately determined that the Covered Person is not entitled to be
indemnified under this Article VII or otherwise.

SECTION 7.03. CLAIMS BY DIRECTORS AND OFFICERS. If a claim for indemnification
or advancement of expenses under this Article VII is not paid in full within
thirty days after a written claim therefor by the Covered Person has been
received by the Corporation, the Covered Person may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the Covered Person is not
entitled to the requested indemnification or advancement of expenses under
applicable law.

SECTION 7.04. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may
indemnify and advance expenses to any person who was or is made or is threatened
to be made or is otherwise involved in any proceeding by reason of the fact that
such person, or a person for whom such person is the legal representative, is or
was an employee or agent of the Corporation or, while an employee or agent of
the Corporation, is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans, against all liability and loss suffered and
expenses (including attorney's fees) reasonably incurred by such person in
connection with such proceeding. The ultimate determination of entitlement to
indemnification of persons who are non-director or officer employees or agents
shall be made in such manner as is determined by the Board of Directors in


                                       10



its sole discretion. Notwithstanding the foregoing sentence, the Corporation
shall not be required to indemnify a person in connection with a proceeding
initiated by such person if the proceeding was not authorized in advance by the
Board of Directors.

SECTION 7.05. ADVANCEMENT OF EXPENSES OF EMPLOYEES AND AGENTS. The Corporation
may pay the expenses (including attorney's fees) incurred by an employee or
agent in defending any proceeding in advance of its final disposition on such
terms and conditions as may be determined by the Board of Directors.

SECTION 7.06. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
this Article VII shall not be exclusive of any other rights which such person
may have or hereafter acquire under any statute, provision of the certificate of
incorporation, these by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.

SECTION 7.07. OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director, officer
or employee of another Corporation, partnership, joint venture, trust,
organization or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other Corporation, partnership, joint
venture, trust, organization or other enterprise.

SECTION 7.08. INSURANCE. The Board of Directors may, to the full extent
permitted by applicable law as it presently exists, or may hereafter be amended
from time to time, authorize an appropriate officer or officers to purchase and
maintain at the Corporation's expense insurance: (a) to indemnify the
Corporation for any obligation which it incurs as a result of the
indemnification of directors, officers and employees under the provisions of
this Article VII; and (b) to indemnify or insure directors, officers and
employees against liability in instances in which they may not otherwise be
indemnified by the Corporation under the provisions of this Article VII.

SECTION 7.09. AMENDMENT OR REPEAL. Any repeal or modification of the foregoing
provisions of this Article VII shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification. The rights provided hereunder
shall inure to the benefit of any Covered Person and such person's heirs,
executors and administrators.

                                  ARTICLE VIII

                             CERTIFICATES FOR SHARES

SECTION 8.01. CERTIFICATES OF SHARES. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate signed by, or in the name of the Corporation by
the Chairman or Vice Chairman of the Board of Directors, Chief Executive
Officer, or the President or Vice President, and by the Treasurer or an
Assistant


                                       11



Treasurer, or the Secretary or an Assistant Secretary of the Corporation
representing the number of shares registered in certificate form. Any or all the
signatures on the certificate may be a facsimile.

SECTION 8.02. SIGNATURES OF FORMER OFFICER, TRANSFER AGENT OR REGISTRAR. In case
any officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such person or entity
were such officer, transfer agent or registrar at the date of issue.

SECTION 8.03. TRANSFER OF SHARES. Transfers of shares of the Corporation shall
be made only on the books of the Corporation by the holder of record thereof or
by his legal representative, who shall furnish proper evidence of authority to
transfer, or by his or her attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, and on surrender
for cancellation of certificate for such shares. Prior to due presentment of a
certificate for shares for registration of transfer, the Corporation may treat a
registered owner of such shares as the person exclusively entitled to vote, to
receive notifications and otherwise have and exercise all of the right and
powers of an owner of shares.

SECTION 8.04. LOST, DESTROYED OR STOLEN CERTIFICATES. Whenever a certificate
representing shares of the Corporation has been lost, destroyed or stolen, the
holder thereof may file in the office of the Corporation an affidavit setting
forth, to the best of his knowledge and belief, the time, place, and
circumstance of such loss, destruction or theft together with a statement of
indemnity sufficient in the opinion of the Board of Directors to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss of any such certificate. Thereupon the Board may cause to be issued
to such person or such person's legal representative a new certificate or a
duplicate of the certificate alleged to have been lost, destroyed or stolen. In
the exercise of its discretion, the Board of Directors may waive the
indemnification requirements provided herein.

                                   ARTICLE IX

                                    DIVIDENDS

SECTION 9. DIVIDENDS. The Board of Directors of the Corporation may declare and
pay dividends upon the shares of the Corporation's capital stock in any form
determined by the Board of Directors, in the manner and upon the terms and
conditions provided by law.

                                    ARTICLE X

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 10.01. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.


                                       12



SECTION 10.02. LOANS. No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.

SECTION 10.03. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by one or more officers or agents of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

SECTION 10.04. DEPOSITS. The funds of the Corporation may be deposited or
invested in such bank account, in such investments or with such other
depositaries as determined by the Board of Directors.

                                   ARTICLE XI

                                   AMENDMENTS

SECTION 11. AMENDMENTS. These By-laws may be adopted, amended or repealed by
either the Corporation's Board of Directors or its stockholders.


                                       13



                                   ATTESTATION

          The undersigned, being the Secretary of Summit Care Pharmacy, Inc.,
does hereby certify the foregoing to be By-Laws of the Corporation.

                                        SUMMIT CARE PHARMACY, INC.


                                        /s/ Roland G. Rapp
                                        ----------------------------------------
                                        Roland G. Rapp
                                        Secretary

EX-3.9

                                                                     EXHIBIT 3.9

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                           ALEXANDRIA CARE CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                           ALEXANDRIA CARE CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

      This Certificate of Conversion to Limited Liability Company, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to convert Alexandria Care Center, LLC, a California limited liability
company, to Alexandria Care Center, LLC, a Delaware limited liability company,
under the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et
seq.).

      1. Alexandria Care Center, LLC was first formed on July 19, 2004. The
jurisdiction of Alexandria Care Center, LLC at the time it was first formed was
California.

      2. Alexandria Care Center, LLC's name immediately prior to the filing of
this Certificate of Conversion to Limited Liability Company was Alexandria Care
Center, LLC.

      3. The name of Alexandria Care Center, LLC as set forth in its certificate
of formation is Alexandria Care Center, LLC.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.


                                          /s/ Roland Rapp
                                          ------------------------------------
                                          Roland Rapp
                                          Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                           ALEXANDRIA CARE CENTER, LLC

      This Certificate of Formation of Alexandria Care Center, LLC, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

      FIRST. The name of the limited liability company formed hereby is
Alexandria Care Center, LLC.

      SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                                      /s/
                                          ------------------------------------
                                          Roland Rapp
                                          Authorized Person

EX-3.10

                                                                    Exhibit 3.10


                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           ALEXANDRIA CARE CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

        This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Alexandria Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, a Delaware corporation, as
the sole equity member (the "Member"), effective as of July 19, 2004 (the
"Effective Date").

        The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

        Section 1.01 Name. The name of the LLC is Alexandria Care Center, LLC
(the "LLC").

        Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

        Section 1.03 Registered Office. The address of the registered office of
the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

        Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

        Section 1.05 Term. The LLC shall have a perpetual existence.

        Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

        The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

        Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                       2

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

        Section 4.01 Unit Certificates. The limited liability company interests
of the LLC shall consist of 100 units (the "Membership Interests"), which shall
be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

        "This certificate evidences a membership interest in Alexandria Care
        Center, LLC and shall be a security governed by Article 8 of the Uniform
        Commercial Code as in effect in the State of Delaware and, to the extent
        permitted by applicable law, Article 8 of the Uniform Commercial Code of
        each other applicable jurisdiction."

        "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
        NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
        TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
        Limited Liability Company maintains books for the purpose of registering
        transfers. This Certificate has not been and will not be registered
        under the Securities Act of 1933 or under the securities or blue sky
        laws of any state. The holder of this Certificate, by its acceptance
        hereof, represents that it is acquiring this security for investment and
        not with a view to any sale or distribution hereof."

        This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

        Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

        Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

        Section 4.04 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is not


                                       3

in violation of Sections 18-607 or 18-804 of the Act or any contractual
agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

        Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

        Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:



                                        
               Jose Lynch                  President and Chief Executive Officer

               John Harrison               Chief Financial Officer

               Roland Rapp                 Vice President and Secretary



        The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

        Section 5.03 Chief Executive Officer. The Chief Executive Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Executive Officer, have general charge of the
business, affairs and property of the LLC and general supervision over the other
Officers and any of the LLC's employees and agents and see that all orders and
resolutions of the LLC are carried into effect.



                                       4

        Section 5.04 President. The President shall, under the direction of the
Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

        Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

        Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

        Section 5.07 Secretary. The Secretary shall, under the direction of the
Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                  ARTICLE VI.
                                 INDEMNIFICATION

        Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                       5

whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.



                                       6

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

        Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

        Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.



                                       7

        Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

        Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

        Section 7.05 Counterparts. This Agreement may be executed in any number
of identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

        Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]




                                       8


        Lmited Liability Company Operating Agreement of Alexandria Care Center,
LLC IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                     MEMBER:

                                     Summit Care Corporation,
                                     a California corporation


                                     By:  /s/ Roland Rapp
                                          ------------------------------
                                          Roland Rapp
                                          Secretary


                                      S-1


                                    EXHIBIT A
                                INITIAL MANAGERS



Jose Lynch

John Harrison

Roland Rapp

EX-3.11

                                                                    Exhibit 3.11

                            CERTIFICATE OF FORMATION

                                       OF

                              ALTA CARE CENTER, LLC

     This Certificate of Formation of Alta Care Center, LLC, dated as of July
3, 2003, is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Alta Care
Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.12

                                                                   Exhibit 3.12

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                              ALTA CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Alta Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Alta Care Center, LLC (the
"LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Alta Care Center,
          LLC and shall be a security governed by Article 8 of the Uniform
          Commercial Code as in effect in the State of Delaware and, to the
          extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        3



          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer

          Jose Lynch         President


                                        4



          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                        5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                        6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

[Alta Care Center, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME      ADDRESS
- -------------      -------
                
Alta Care Center   13075 Blackbird
                   Garden Grove, California 92643



                                      A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Alta Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE:  Management Agreement - Alta Care Center, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Alta Care Center, LLC, a Delaware
limited liability company (the "Company"), in accordance with the Limited
Liability Company Operating Agreement of the Company, as it may be amended or
restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.13

                                                                    Exhibit 3.13

                            CERTIFICATE OF FORMATION

                                       OF

                        ANAHEIM TERRACE CARE CENTER, LLC

     This Certificate of Formation of Anaheim Terrace Care Center, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Anaheim
Terrace Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.14

                                                                    Exhibit 3.14

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        ANAHEIM TERRACE CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Anaheim Terrace Care Center, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Anaheim Terrace Care Center,
LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole Member and shall
hold all Membership Interests (as defined in Section 4.02 below) effective as of
the date of this Agreement. The name and address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Anaheim Terrace
          Care Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                        3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                        4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                        5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          To the fullest extent permitted by law, the LLC shall indemnify and
hold harmless (i) the Member, (ii) any affiliate of the Member, and (iii) any
officer, director, employee, or agent of the LLC, the Member or any of its
affiliates, (each, an "Indemnitee"), from and against any claim, loss, damage,
liability, or reasonable expense (including reasonable attorneys' fees, court
costs, and costs of investigation and appeal) suffered or incurred by any such
Indemnitee by reason of, or arising from, the operations, business, or affairs
of, or any action taken or failure to act on behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                        6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

[Anaheim Terrace Care Center, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                 ADDRESS
- -------------                 -------
                           
Anaheim Terrace Care Center   141 S. Knott Avenue
                              Anaheim, California 92804



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Anaheim Terrace Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE: Management Agreement - Anaheim Terrace Care Center, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Anaheim Terrace Care Center, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.15

                                                                    Exhibit 3.15

                            CERTIFICATE OF FORMATION

                                       OF

                BALDWIN HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Baldwin Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                BALDWIN HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.16

                                                                    Exhibit 3.16

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                BALDWIN HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Baldwin Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Baldwin Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1


          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Baldwin Healthcare and
     Rehabilitation Center, LLC and shall be a security governed by Article 8 of
     the Uniform Commercial Code as in effect in the State of Delaware and, to
     the extent permitted by applicable law, Article 8 of the Uniform Commercial
     Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                       ADDRESS
- -------------                                       -------
                                                 
Baldwin Healthcare and Rehabilitation Center, LLC   1223 Orchard Lane
                                                    Baldwin City, Kansas 66006



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.17

                                                                    Exhibit 3.17

                            CERTIFICATE OF FORMATION

                                       OF

                           BAY CREST CARE CENTER, LLC

     This Certificate of Formation of Bay Crest Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Bay Crest
Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.18

                                                                    Exhibit 3.18

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           BAY CREST CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Bay Crest Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Bay Crest Care Center, LLC
(the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Bay Crest Care
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       3



          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer

          Jose Lynch         President


                                       4



          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

[Bay Crest Care Center, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME           ADDRESS
- -------------           -------
                     
Bay Crest Care Center   3750 Garnet Street
                        Torrance, California 90503



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Bay Crest Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE: Management Agreement - Bay Crest Care Center, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Bay Crest Care Center, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.19

                                                                    Exhibit 3.19

                            CERTIFICATE OF FORMATION

                                       OF

              BRIARCLIFF NURSING AND REHABILITATION CENTER GP, LLC

     This Certificate of Formation of Briarcliff Nursing and Rehabilitation
Center GP, LLC, dated as of July 3, 2003, is being duly executed and filed by
Sally G. Burns, as an authorized person, to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is
Briarcliff Nursing and Rehabilitation Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.20

                                                                   Exhibit 3.20

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
              BRIARCLIFF NURSING AND REHABILITATION CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Briarcliff Nursing and Rehabilitation Center GP, LLC (the "LLC"), is made and
entered into effective as of July 20, 2004 (the "Effective Date"), by Summit
Care Corporation, a California corporation, as the sole equity member (the
"Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Briarcliff
Nursing and Rehabilitation Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Briarcliff
          Nursing and Rehabilitation Center GP, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers  (the "Officers") to the extent
specifically set forth in this Agreement and under the direction of the Member
 and the Board of Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                       7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Briarcliff Nursing and Rehabilitation Center GP, LLC


                                       S-1




                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.21

                                                                    Exhibit 3.21

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                            BRIER OAK ON SUNSET, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                            BRIER OAK ON SUNSET, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

      This Certificate of Conversion to Limited Liability Company, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to convert Brier Oak on Sunset, LLC, a California limited liability
company, to Brier Oak on Sunset, LLC, a Delaware limited liability company,
under the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et
seq.).

      1.    Brier Oak on Sunset, LLC was first formed on July 19 2004. The
            jurisdiction of Brier Oak on Sunset, LLC at the time it was first
            formed was California.

      2.    Brier Oak on Sunset, LLC's name immediately prior to the filing of
            this Certificate of Conversion to Limited Liability Company was
            Brier Oak on Sunset, LLC.

      3.    The name of Brier Oak on Sunset, LLC as set forth in its certificate
            of formation is Brier Oak on Sunset, LLC.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                         /s/ Roland Rapp
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                            BRIER OAK ON SUNSET, LLC

      This Certificate of Formation of Brier Oak on Sunset, LLC, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

      FIRST. The name of the limited liability company formed hereby is Brier
Oak on Sunset, LLC.

      SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                                      /s/
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person

EX-3.22

                                                                   Exhibit 3.22

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            BRIER OAK ON SUNSET, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Brier Oak on Sunset, LLC (the
"LLC"), is entered into by Summit Care Corporation, a Delaware corporation, as
the sole equity member (the "Member"), effective as of July 19, 2004 (the
"Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Brier Oak on Sunset, LLC
(the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Brier Oak on
          Sunset, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Brier Oak on Sunset, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.23

                                                                    Exhibit 3.23

                            CERTIFICATE OF FORMATION

                                       OF

                        CAREHOUSE HEALTHCARE CENTER, LLC

     This Certificate of Formation of Carehouse Healthcare Center, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Carehouse
Healthcare Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.24

                                                                   Exhibit 3.24

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        CAREHOUSE HEALTHCARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Carehouse Healthcare Center, LLC (the "LLC"), is made and entered into effective
as of July 19, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Carehouse
Healthcare Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Carehouse
          Healthcare Center, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Carehouse Healthcare Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.25

                                                                    Exhibit 3.25

                            CERTIFICATE OF FORMATION

                                       OF

                       CARSON SENIOR ASSISTED LIVING, LLC

     This Certificate of Formation of Carson Senior Assisted Living, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Carson
Senior Assisted Living, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.26

                                                                   Exhibit 3.26

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                       CARSON SENIOR ASSISTED LIVING, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Carson Senior Assisted Living,
LLC (the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Carson Senior Assisted
Living, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Carson Senior
          Assisted Living, LLC and shall be a security governed by Article 8 of
          the Uniform Commercial Code as in effect in the State of Delaware and,
          to the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                       3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                       4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

 [Carson Senior Assisted Living, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME              ADDRESS
- -------------              -------
                        
Carson Retirement Center   345 East Carson Street
                           Carson, California 90745



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Carson Senior Assisted Living, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE: Management Agreement - Carson Senior Assisted Living, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Carson Senior Assisted Living, LLC,
a Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Ronald Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.27

                                                                    Exhibit 3.27


                            CERTIFICATE OF FORMATION

                                       OF

                           CLAIRMONT BEAUMONT GP, LLC

     This Certificate of Formation of Clairmont Beaumont GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Clairmont
Beaumont GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.28

                                                                   Exhibit 3.28

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           CLAIRMONT BEAUMONT GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Clairmont Beaumont GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Clairmont
Beaumont GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Clairmont
          Beaumont GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                  ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Clairmont Beaumont GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.29

                                                                    Exhibit 3.29

                            CERTIFICATE OF FORMATION

                                       OF

                           CLAIRMONT LONGVIEW GP, LLC

     This Certificate of Formation of Clairmont Longview GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Clairmont
Longview GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.30

                                                                   Exhibit 3.30

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           CLAIRMONT LONGVIEW GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Clairmont Longview GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Clairmont
Longview GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Clairmont
          Longview GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Clairmont Longview GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.31

                                                                    Exhibit 3.31

                            CERTIFICATE OF FORMATION

                                       OF

                         COLONIAL NEW BRAUNFELS GP, LLC

     This Certificate of Formation of Colonial New Braunfels GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Colonial
New Braunfels GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.32

                                                                   Exhibit 3.32

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         COLONIAL NEW BRAUNFELS GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Colonial New Braunfels GP, LLC (the "LLC"), is made and entered into effective
as of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Colonial
New Braunfels GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Colonial New
          Braunfels GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent
specifically set forth in this Agreement and under the direction of the Member
and the Board of Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary


                                       4



          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                   ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                       7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8


          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                     MEMBER:

                                     Summit Care Corporation,
                                     a California corporation


                                     By: /s/ Roland Rapp
                                         ---------------------------------------
                                         Roland Rapp
                                         Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Colonial New Braunfels GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.33

                                                                    Exhibit 3.33

                            CERTIFICATE OF FORMATION

                                       OF

                             COLONIAL TYLER GP, LLC

     This Certificate of Formation of Colonial Tyler GP, LLC, dated as of July
3, 2003, is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Colonial
Tyler GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.34

                                                                   Exhibit 3.34

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                             COLONIAL TYLER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Colonial Tyler GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Colonial
Tyler GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Colonial Tyler
          GP, LLC and shall be a security governed by Article 8 of the Uniform
          Commercial Code as in effect in the State of Delaware and, to the
          extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Colonial Tyler GP, LLC


                                      S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.35

                                                                    Exhibit 3.35

                            CERTIFICATE OF FORMATION

                                       OF

                         COMANCHE NURSING CENTER GP, LLC

     This Certificate of Formation of Comanche Nursing Center GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Comanche
Nursing Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.36

                                                                   Exhibit 3.36

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         COMANCHE NURSING CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Comanche Nursing Center GP, LLC (the "LLC"), is made and entered into effective
as of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Comanche
Nursing Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Comanche Nursing
          Center GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Comanche Nursing Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.37

                                                                    Exhibit 3.37

                            CERTIFICATE OF FORMATION

                                       OF

                         CORONADO NURSING CENTER GP, LLC

     This Certificate of Formation of Coronado Nursing Center GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Coronado
Nursing Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.38

                                                                    Exhibit 3.38

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         CORONADO NURSING CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Coronado Nursing Center GP, LLC (the "LLC"), is made and entered into effective
as of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Coronado
Nursing Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Coronado Nursing
          Center GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act (ii) an


                                        7



agreement of all Members to dissolve the LLC or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Coronado Nursing Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.39

                                                                    Exhibit 3.39

                            CERTIFICATE OF FORMATION

                                       OF

                           DEVONSHIRE CARE CENTER, LLC

     This Certificate of Formation of Devonshire Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is
Devonshire Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.40

                                                                   Exhibit 3.40

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           DEVONSHIRE CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Devonshire Care Center, LLC (the "LLC"), is made and entered into effective as
of July 19, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Devonshire
Care Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Devonshire Care
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch     President and Chief Executive Officer

          John Harrison  Chief Financial Officer

          Roland Rapp    Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Devonshire Care Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.41

                                                                    Exhibit 3.41

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                            ELMCREST CARE CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                            ELMCREST CARE CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

      This Certificate of Conversion to Limited Liability Company, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to convert Elmcrest Care Center, LLC, a California limited liability
company, to Elmcrest Care Center, LLC, a Delaware limited liability company,
under the Delaware Limited Liability Company Act (6 Del. C. Section 18-101, et
seq.).

      1.    Elmcrest Care Center, LLC was first formed on July 19, 2004. The
            jurisdiction of Elmcrest Care Center, LLC at the time it was first
            formed was California.

      2.    Elmcrest Care Center, LLC's name immediately prior to the filing of
            this Certificate of Conversion to Limited Liability Company was
            Elmcrest Care Center, LLC.

      3.    The name of Elmcrest Care Center, LLC as set forth in its
            certificate of formation is Elmcrest Care Center, LLC.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                         /s/ Roland Rapp
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                            ELMCREST CARE CENTER, LLC

      This Certificate of Formation of Elmcrest Care Center, LLC, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

      FIRST. The name of the limited liability company formed hereby is Elmcrest
Care Center, LLC.

      SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                                      /s/
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person

EX-3.42

                                                                   Exhibit 3.42

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            ELMCREST CARE CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Elmcrest Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, a Delaware corporation, as
the sole equity member (the "Member"), effective as of July 19, 2004 (the
"Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Elmcrest Care Center, LLC
(the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Elmcrest Care
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Elmcrest Care Center, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.43

                                                                   Exhibit 3.43

                            CERTIFICATE OF FORMATION

                                       OF

                EUREKA HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Eureka Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                EUREKA HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of August 8, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.44

                                                                    Exhibit 3.44

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                EUREKA HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Eureka Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of August
15, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Eureka Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy Van Dran, as an authorized person, with the Secretary of State of the
State of Delaware on August 8, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California  92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Eureka Healthcare
          and Rehabilitation Center, LLC and shall be a security governed by
          Article 8 of the Uniform Commercial Code as in effect in the State of
          Delaware and, to the extent permitted by applicable law, Article 8 of
          the Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                        3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                        4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                        5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                        6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                      ADDRESS
- -------------                                      -------
                                                
Eureka Healthcare and Rehabilitation Center, LLC   2353 23rd Street
                                                   Eureka, CA 95501



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.45

                                                                    Exhibit 3.45



                            CERTIFICATE OF FORMATION

                                       OF

                           FLATONIA OAK MANOR GP, LLC

        This Certificate of Formation of Flatonia Oak Manor GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. ss.18-101, et. seq.).

        FIRST. The name of the limited liability company formed hereby is
Flatonia Oak Manor GP, LLC.

        SECOND.The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

        IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                                /s/ Sally G. Burns
                                                -------------------------------
                                                Sally G. Burns
                                                Authorized Person

EX-3.46

                                                                    Exhibit 3.46

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           FLATONIA OAK MANOR GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Flatonia Oak Manor GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Flatonia
Oak Manor GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Flatonia Oak
          Manor GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Flatonia Oak Manor GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.47

                                                                    Exhibit 3.47

                            CERTIFICATE OF FORMATION

                                       OF

                            FOUNTAIN CARE CENTER, LLC

     This Certificate of Formation of Fountain Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Fountain
Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.48

                                                                   Exhibit 3.48

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            FOUNTAIN CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Fountain Care Center, LLC (the "LLC"), is made and entered into effective as of
July 19, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Fountain
Care Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Fountain Care
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Fountain Care Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.49

                                                                    Exhibit 3.49

                            CERTIFICATE OF FORMATION

                                       OF

                      FOUNTAIN SENIOR ASSISTED LIVING, LLC

     This Certificate of Formation of Fountain Senior Assisted Living, LLC,
dated as of July 3, 2003, is being duly executed and filed by Sally G. Burns,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Fountain
Senior Assisted Living, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.50

                                                                   Exhibit 3.50

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                      FOUNTAIN SENIOR ASSISTED LIVING, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Fountain Senior Assisted Living, LLC (the "LLC"), is made and entered into
effective as of July 19, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Fountain
Senior Assisted Living, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Fountain Senior
          Assisted Living, LLC and shall be a security governed by Article 8 of
          the Uniform Commercial Code as in effect in the State of Delaware and,
          to the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

               Jose Lynch      President and Chief Executive Officer

               John Harrison   Chief Financial Officer

               Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                  ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Fountain Senior Assisted Living, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.51

                                                                    Exhibit 3.51

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                 FOUNTAIN VIEW SUBACUTE AND NURSING CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                 FOUNTAIN VIEW SUBACUTE AND NURSING CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

      This Certificate of Conversion to Limited Liability Company, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to convert Fountain View Subacute and Nursing Center, LLC, a California
limited liability company, to Fountain View Subacute and Nursing Center, LLC, a
Delaware limited liability company, under the Delaware Limited Liability Company
Act (6 Del. C. Section 18-101, et seq.).

      1.    Fountain View Subacute and Nursing Center, LLC was first formed on
            July 19, 2004. The jurisdiction of Fountain View Subacute and
            Nursing Center, LLC at the time it was first formed was California.

      2.    Fountain View Subacute and Nursing Center, LLC's name immediately
            prior to the filing of this Certificate of Conversion to Limited
            Liability Company was Fountain View Subacute and Nursing Center,
            LLC.

      3.    The name of Fountain View Subacute and Nursing Center, LLC as set
            forth in its certificate of formation is Fountain View Subacute and
            Nursing Center, LLC.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                         /s/ Roland Rapp
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                 FOUNTAIN VIEW SUBACUTE AND NURSING CENTER, LLC

      This Certificate of Formation of Fountain View Subacute and Nursing
Center, LLC, dated as of July 19, 2004, is being duly executed and filed by
Roland Rapp, as an authorized person, to form a limited liability company under
the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

      FIRST. The name of the limited liability company formed hereby is Fountain
View Subacute and Nursing Center, LLC.

      SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

           IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                                      /s/
                                         ---------------------------------------
                                         Roland Rapp
                                         Authorized Person

EX-3.52

                                                                   Exhibit 3.52

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                 FOUNTAIN VIEW SUBACUTE AND NURSING CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Fountain View Subacute and
Nursing Center, LLC (the "LLC"), is entered into by Summit Care Corporation, a
Delaware corporation, as the sole equity member (the "Member"), effective as of
July 19, 2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Fountain View Subacute and
Nursing Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Fountain View
          Subacute and Nursing Center, LLC and shall be a security governed by
          Article 8 of the Uniform Commercial Code as in effect in the State of
          Delaware and, to the extent permitted by applicable law, Article 8 of
          the Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Fountain View Subacute and
Nursing Center, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.53

                                                                   Exhibit 3.53

                            CERTIFICATE OF FORMATION

                                       OF

                GRANADA HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Granada Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                GRANADA HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of August 8, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.54

                                                                   Exhibit 3.54

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                GRANADA HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Granada Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of August
15, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Granada Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy Van Dran, as an authorized person, with the Secretary of State of the
State of Delaware on August 8, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                       1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Granada
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                       3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                       4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            -----------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY




PROPERTY NAME                                   ADDRESS
- -------------                                   -------
                                             
Granada Healthcare and Rehabilitation Center,   2885 Harris Ave
LLC                                             Eureka, CA 95503



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.55

                                                                    Exhibit 3.55

                            CERTIFICATE OF FORMATION

                                       OF

                     GUADALUPE VALLEY NURSING CENTER GP, LLC

     This Certificate of Formation of Guadalupe Valley Nursing Center GP, LLC,
dated as of July 3, 2003, is being duly executed and filed by Sally G. Burns,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Guadalupe
Valley Nursing Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.56

                                                                    Exhibit 3.56

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                     GUADALUPE VALLEY NURSING CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Guadalupe Valley Nursing Center GP, LLC (the "LLC"), is made and entered into
effective as of July 20, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Guadalupe
Valley Nursing Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Guadalupe Valley
          Nursing Center GP, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Guadalupe Valley Nursing Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.57

                                                                    Exhibit 3.57

                            CERTIFICATE OF FORMATION

                                       OF

                      HALLETTSVILLE REHABILITATION GP, LLC

     This Certificate of Formation of Hallettsville Rehabilitation GP, LLC,
dated as of July 3, 2003, is being duly executed and filed by Sally G. Burns,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is
Hallettsville Rehabilitation GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.58

                                                                    Exhibit 3.58

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                      HALLETTSVILLE REHABILITATION GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Hallettsville Rehabilitation GP, LLC (the "LLC"), is made and entered into
effective as of July 20, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is
Hallettsville Rehabilitation GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Hallettsville
          Rehabilitation GP, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

           Jose Lynch      President and Chief Executive Officer

           John Harrison   Chief Financial Officer

           Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                 MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Hallettsville Rehabilitation GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.59

                                                                    Exhibit 3.59

                            CERTIFICATE OF FORMATION

                                       OF

                         HALLMARK REHABILITATION GP, LLC

     This Certificate of Formation of Hallmark Rehabilitation GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Hallmark
Rehabilitation GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.60

                                                                    Exhibit 3.60

                              AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT

                                       OF

                         HALLMARK REHABILITATION GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

      This Amended and Restated Limited Liability Company Operating Agreement
(together with the exhibits attached hereto, this "Agreement") of Hallmark
Rehabilitation GP, LLC (the "LLC"), is made and entered into effective as of
August 14, 2003 (the "Effective Date"), by Hallmark Investment Group, Inc., a
Delaware corporation, as the sole equity member (the "Member").

      The Member, by execution of this Agreement, hereby continues the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

      Section 1.01 Name. The name of the LLC continued hereby is Hallmark
Rehabilitation GP, LLC (the "LLC").

      Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

      Section 1.03 Registered Office. The address of the registered office of
the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

      Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

      Section 1.05 Term. The LLC shall have a perpetual existence.

      Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the sole member of the LLC
thereupon became the designated "authorized person." The Member shall continue
as the designated "authorized person" within the meaning of the Act. The Member
or an Officer shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the



LLC to qualify to do business in the State of California and in any jurisdiction
in which the LLC may wish to conduct business. The existence of the LLC as a
separate legal entity shall continue until cancellation of the Certificate of
Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

      The business purpose of the LLC is to engage in any lawful act or activity
and exercise any powers permitted to limited liability companies organized under
the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

      Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

            (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

            (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

            (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

            (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

            (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

            (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

                                       2



            (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

      Section 4.01 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate (the "Unit Certificate"). The Member hereby
irrevocably elects that all Membership Interests in the LLC shall be securities
governed by Article 8 of the Uniform Commercial Code as in effect in the State
of Delaware and each other applicable jurisdiction. The Unit Certificate shall
bear the following legends:

      "This certificate evidences a membership interest in Hallmark
      Rehabilitation GP LLC and shall be a security governed by Article 8 of the
      Uniform Commercial Code as in effect in the State of Delaware and, to the
      extent permitted by applicable law, Article 8 of the Uniform Commercial
      Code of each other applicable jurisdiction."

      "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
      NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
      RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
      Liability Company maintains books for the purpose of registering
      transfers. This Certificate has not been and will not be registered under
      the Securities Act of 1933 or under the securities or blue sky laws of any
      state. The holder of this Certificate, by its acceptance hereof,
      represents that it is acquiring this security for investment and not with
      a view to any sale or distribution hereof."

      This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

      Section 4.02 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

      Section 4.03 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. The debts,
obligations and liabilities of the LLC, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the LLC,
and the Member shall not be obligated for any such debt, obligation or liability
of the LLC solely by reason of its status as the Member of the LLC.

      Section 4.04 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither

                                       3



reasonably necessary for the operation of the LLC nor the performance of its
contractual obligations, nor which is in violation of Sections 18-607 or 18-804
of the Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

      Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

            (a) be comprised minimally of a President, Chief Executive Officer,
Chief Financial Officer, Vice President, and Secretary;

            (b) be selected by the Member;

            (c) be allowed to serve on the Board of Managers;

            (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

            (e) meet at such times as may be necessary for the business of the
LLC.

      Section 5.02 Continuing Officers. The Officers shall continue in office
following the execution of this Agreement by the Member:

           Boyd Hendrickson                  Chief Executive Officer
           Jose Lynch                        President
           John Harrison                     Chief Financial Officer
           Roland Rapp                       Secretary

      Section 5.03 Chief Executive Officer. The Chief Executive Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Executive Officer, have general charge of the
business, affairs and property of the LLC and general supervision over the other
Officers and any of the LLC's employees and agents and see that all orders and
resolutions of the LLC are carried into effect.

      Section 5.04 President. The President shall, under the direction of the
Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer

                                        4



and when so acting, shall have all the powers of and be subject to all the
restrictions upon the Chief Executive Officer.

      Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

      Section 5.06 Secretary. The Secretary shall, under the direction of the
Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

            (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

            (b) if required, cause notices to be duly given in accordance with
the provisions of the Agreement and as required by statute;

            (c) be custodian of the records; and

            (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

      To the fullest extent permitted by law, the Company shall indemnify and
hold harmless (i) the Member, (ii) any affiliate of the Member, and (iii) any
officer, director, employee, or agent of the Company, the Member or any of its
affiliates, (each, an "Indemnitee"), from and against any claim, loss, damage,
liability, or reasonable expense (including reasonable attorneys' fees, court
costs, and costs of investigation and appeal) suffered or incurred by any such
Indemnitee by reason of, or arising from, the operations, business, or affairs
of, or any action taken or failure to act on behalf of, the Company.

                                  ARTICLE VII.
                                  MISCELLANEOUS

      Section 7.01 Assignments; Additions; Transfers; Dissolution.

            (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by

                                       5



the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

            (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

            (c) Admission of Additional Members. One or more additional members
of the LLC may be admitted to the LLC with the written consent of the Member.

            (d) Dissolution. The LLC shall be dissolved, and its affairs shall
be wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

      Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

      Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

      Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

      Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

      Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]

                                       6



      IN WITNESS WHEREOF, the Member has duly executed this Agreement effective
as of the Effective Date.

                                   MEMBER:

                                   Hallmark Investment Group, Inc.,
                                   a Delaware corporation

                                   By:  /s/ Roland Rapp
                                        --------------------------------
                                        Roland Rapp
                                        Secretary

                                      S-1


                                    EXHIBIT A
                               CONTINUING MANAGERS

Boyd Hendrickson

Mark Wortley

John Harrison

Roland Rapp



August __, 2003

Hallmark Rehabilitation GP, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California  92610

      Re: Management Agreement - Hallmark Rehabilitation GP, LLC

Ladies and Gentlemen:

      For good and valuable consideration, each of the undersigned persons, who
have been designated as Managers of Hallmark Rehabilitation GP, LLC, a Delaware
limited liability company (the "Company"), in accordance with the Amended and
Restated Limited Liability Company Operating Agreement of the Company, as it may
be amended or restated from time to time (the "LLC Agreement"), hereby agree:

      1. To accept such person's rights and authority as a Manager (as defined
in the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

      2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

      IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.

                                  /s/ Boyd Hendrickson
                                  --------------------------------------
                                  Boyd Hendrickson

                                  /s/ Mark Wortley
                                  --------------------------------------
                                  Mark Wortley

                                  /s/ John Harrison
                                  --------------------------------------
                                  John Harrison

                                  /s/ Roland Rapp
                                  --------------------------------------
                                  Roland Rapp

EX-3.61

                                                                    EXHIBIT 3.61

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                     HANCOCK PARK REHABILITATION CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                     HANCOCK PARK REHABILITATION CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

         This Certificate of Conversion to Limited Liability Company, dated as
of July 19, 2004, is being duly executed and filed by Roland Rapp, as an
authorized person, to convert Hancock Park Rehabilitation Center, LLC, a
California limited liability company, to Hancock Park Rehabilitation Center,
LLC, a Delaware limited liability company, under the Delaware Limited Liability
Company Act (6 Del. C. Section 18-101, et seq.).

         1. Hancock Park Rehabilitation Center, LLC was first formed on July 19,
2004. The jurisdiction of Hancock Park Rehabilitation Center, LLC at the time it
was first formed was California.

         2. Hancock Park Rehabilitation Center, LLC's name immediately prior to
the filing of this Certificate of Conversion to Limited Liability Company was
Hancock Park Rehabilitation Center, LLC.

         3. The name of Hancock Park Rehabilitation Center, LLC as set forth in
its certificate of formation is Hancock Park Rehabilitation Center, LLC.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                   /s/ Roland Rapp
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                     HANCOCK PARK REHABILITATION CENTER, LLC

         This Certificate of Formation of Hancock Park Rehabilitation Center,
LLC, dated as of July 19, 2004, is being duly executed and filed by Roland Rapp,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is
Hancock Park Rehabilitation Center, LLC.

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                              /s/
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person

EX-3.62

                                                                    Exhibit 3.62

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                     HANCOCK PARK REHABILITATION CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Hancock Park Rehabilitation
Center, LLC (the "LLC"), is entered into by Summit Care Corporation, a Delaware
corporation, as the sole equity member (the "Member"), effective as of July 19,
2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Hancock Park Rehabilitation
Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Hancock Park
          Rehabilitation Center, LLC and shall be a security governed by Article
          8 of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Hancock Park Rehabilitation
Center, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.63

                                                                    Exhibit 3.63

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                    HANCOCK PARK SENIOR ASSISTED LIVING, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                    HANCOCK PARK SENIOR ASSISTED LIVING, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

         This Certificate of Conversion to Limited Liability Company, dated as
of July 19, 2004, is being duly executed and filed by Roland Rapp, as an
authorized person, to convert Hancock Park Senior Assisted Living, LLC, a
California limited liability company, to Hancock Park Senior Assisted Living,
LLC, a Delaware limited liability company, under the Delaware Limited Liability
Company Act (6 Del. C. Section 18-101, et seq.).

         1. Hancock Park Senior Assisted Living, LLC was first formed on July
19, 2004. The jurisdiction of Hancock Park Senior Assisted Living, LLC at the
time it was first formed was California.

         2. Hancock Park Senior Assisted Living, LLC's name immediately prior to
the filing of this Certificate of Conversion to Limited Liability Company was
Hancock Park Senior Assisted Living, LLC.

         3. The name of Hancock Park Senior Assisted Living, LLC as set forth in
its certificate of formation is Hancock Park Senior Assisted Living, LLC.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                   /s/ Roland Rapp
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                    HANCOCK PARK SENIOR ASSISTED LIVING, LLC

         This Certificate of Formation of Hancock Park Senior Assisted Living,
LLC, dated as of July 19, 2004, is being duly executed and filed by Roland Rapp,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is
Hancock Park Senior Assisted Living, LLC.

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                              /s/
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person

EX-3.64

                                                                    Exhibit 3.64

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                    HANCOCK PARK SENIOR ASSISTED LIVING, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Hancock Park Senior Assisted
Living, LLC (the "LLC"), is entered into by Summit Care Corporation, a Delaware
corporation, as the sole equity member (the "Member"), effective as of July 19,
2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Hancock Park Senior Assisted
Living, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Hancock Park
          Senior Assisted Living, LLC and shall be a security governed by
          Article 8 of the Uniform Commercial Code as in effect in the State of
          Delaware and, to the extent permitted by applicable law, Article 8 of
          the Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Hancock Park Senior Assisted
Living, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.65

                                                                    Exhibit 3.65

                            CERTIFICATE OF FORMATION

                                       OF

                        HEMET SENIOR ASSISTED LIVING, LLC

     This Certificate of Formation of Hemet Senior Assisted Living, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act 6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Hemet
Senior Assisted Living, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.66

                                                                   Exhibit 3.66

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        HEMET SENIOR ASSISTED LIVING, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Hemet Senior Assisted Living, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Hemet Senior Assisted
Living, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Hemet Senior
          Assisted Living, LLC and shall be a security governed by Article 8 of
          the Uniform Commercial Code as in effect in the State of Delaware and,
          to the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                       3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers  (the "Officers") to the extent
specifically set forth in this Agreement and under the direction of the Member
and  the Board of Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                       4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

[Hemet Senior Assisted Living, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                 ADDRESS
- -------------                                 -------
                                           
Hemet Senior Assisted Living and Retirement   1353 East Devonshire Avenue
Center                                        Hemet, California 92544



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Hemet Senior Assisted Living, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE: Management Agreement - Hemet Senior Assisted Living, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Hemet Senior Assisted Living, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                              /s/ Jose Lynch
                                              ----------------------------------
                                              Jose Lynch


                                              /s/ John Harrison
                                              ----------------------------------
                                              John Harrison


                                              /s/ Roland Rapp
                                              ----------------------------------
                                              Roland Rapp

EX-3.67

                                                                   Exhibit 3.67

                            CERTIFICATE OF FORMATION

                                       OF

               HIGHLAND HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Highland Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               HIGHLAND HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.68

                                                                    Exhibit 3.68

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
               HIGHLAND HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Highland Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Highland Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Highland Healthcare
     and Rehabilitation Center, LLC and shall be a security governed by Article
     8 of the Uniform Commercial Code as in effect in the State of Delaware and,
     to the extent permitted by applicable law, Article 8 of the Uniform
     Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5




     IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                        ADDRESS
- -------------                                        -------
                                                  
Highland Healthcare and Rehabilitation Center, LLC   402 S. Avenue
                                                     Highland, Kansas 66035



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.69

                                                                    Exhibit 3.69

                            CERTIFICATE OF FORMATION

                                       OF

                          HOSPICE CARE INVESTMENTS, LLC

     This Certificate of Formation of Hospice Care Investments, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                          HOSPICE CARE INVESTMENTS, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 30, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.70

                                                                    Exhibit 3.70

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          HOSPICE CARE INVESTMENTS, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Hospice Care Investments, LLC
(the "LLC"), is entered into by Skilled Healthcare Group, Inc. f/k/a Fountain
View, Inc., as the sole equity member (the "Member"), effective as of January
30, 2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Hospice Care Investments,
LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on January 30, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Hospice Care
          Investments, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       3



deems necessary, useful or appropriate for the day-to-day management and conduct
of the LLC's business and which are not otherwise specifically reserved to the
Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Financial
Officer, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Jose Lynch      President

          John Harrison   Chief Financial Officer

          Roland Rapp     Secretary

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       4



          Section 5.03 President. The President shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

          Section 5.04 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Financial Officer and shall have such
powers and discharge such duties as may be assigned to him or her, from time to
time, by the other Officers, Board of Managers or the Member.

          Section 5.05 Secretary. The Secretary shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       5



member of the LLC upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the transfer and, immediately following
such admission, the transferor Member shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]

                                                         LLC Operating Agreement
                                                   Hospice Care Investments, LLC


                                       6



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Skilled Healthcare Group, Inc., a
                                        Delaware corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                              [INTENTIONALLY BLANK]


                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.71

                                                                   Exhibit 3.71

                            CERTIFICATE OF FORMATION

                                       OF

                          HOSPICE CARE OF THE WEST, LLC

     This Certificate of Formation of Hospice Care of the West, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                          HOSPICE CARE OF THE WEST, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 23, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.72

                                                                    Exhibit 3.72

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          HOSPICE CARE OF THE WEST, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Hospice Care of the West, LLC
(the "LLC"), is entered into by Hospice Care Investments, LLC, as the sole
equity member (the "Member"), effective as of January 23, 2004 (the "Effective
Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Hospice Care of the West,
LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on January 23, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                                         LLC Operating Agreement
                                                   Hospice Care of the West, LLC


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

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               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Hospice Care Investments, LLC
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Hospice Care of
          the West, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise

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deems necessary, useful or appropriate for the day-to-day management and conduct
of the LLC's business and which are not otherwise specifically reserved to the
Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Financial
Officer, Managing Director, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Jose Lynch      President

          John Harrison   Chief Financial Officer

          Gina Andres     Managing Director

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          Roland Rapp     Secretary

          Section 5.03 President. The President shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

          Section 5.04 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Financial Officer and shall have such
powers and discharge such duties as may be assigned to him or her, from time to
time, by the other Officers, Board of Managers or the Member.

          Section 5.05 Managing Director. The Managing Director shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Managing Director and shall have such powers and discharge such
duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Secretary. The Secretary shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

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                                        5



                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

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          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]

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                                                   Hospice Care of the West, LLC


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Hospice Care Investments, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                              [INTENTIONALLY BLANK]


                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.73

                                                                    Exhibit 3.73

                            CERTIFICATE OF FORMATION

                                       OF

                           HOSPITALITY NURSING GP, LLC

     This Certificate of Formation of Hospitality Nursing GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is
Hospitality Nursing GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.74

                                                                   Exhibit 3.74

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           HOSPITALITY NURSING GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Hospitality Nursing GP, LLC (the "LLC"), is made and entered into effective as
of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Hospitality
Nursing GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Hospitality
          Nursing GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Hospitality Nursing GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.75

                                                                    EXHIBIT 3.75

                  AMENDED AND RESTATED CERTIFICATE OF FORMATION
                                       OF
                       SECURED RESOURCE MANAGEMENT GP, LLC

      1. This Amended and Restated Certificate of Formation of Leasehold
Resource Group, LLC dated as of July 19, 2004, is being duly executed and filed
by Roland Rapp, as an authorized person, pursuant to Section 18-208 of the
Delaware Limited Liability Company Act, to amend and restate the Certificate of
Formation of Secured Resource Management GP, LLC originally filed on July 3,
2003.

      2. The Certificate of Formation of the limited liability company is hereby
amended and restated in its entirety to read as follows:

      "FIRST. The name of the limited liability company is Leasehold Resource
Group, LLC.

      SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901."

      3. The future effective date and time of this Amended and Restated
Certificate of Formation shall be July 19, 2004 at 11:57 p.m. Eastern Time.

      IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated
Certificate of Formation as of the date first above written.



                                          /s/ Roland Rapp
                                          ------------------------------------
                                          Roland Rapp
                                          Authorized Person

EX-3.76

                                                                   Exhibit 3.76

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
   LEASEHOLD RESOURCE GROUP, LLC (F/K/A SECURED RESOURCE MANAGEMENT, GP, LLC)
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Leasehold Resource Group, LLC (f/k/a Secured Resource Management, GP, LLC) (the
"LLC"), is made and entered into effective as of July 19, 2004 (the "Effective
Date"), by Summit Care Corporation, a California corporation, as the sole equity
member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Leasehold
Resource Group, LLC (f/k/a Secured Resource Management, GP, LLC) (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates



(and any amendments, supplements and/or restatements thereof) necessary for the
LLC to qualify to do business in any jurisdiction in which the LLC may wish to
conduct business. The existence of the LLC as a separate legal entity shall
continue until cancellation of the Certificate of Formation as provided in the
Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Leasehold
          Resource Group, LLC (f/k/a Secured Resource Management, GP, LLC) and
          shall be a security governed by Article 8 of the Uniform Commercial
          Code as in effect in the State of Delaware and, to the extent
          permitted by applicable law, Article 8 of the Uniform Commercial Code
          of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary


                                       4



          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Leasehold Resource Group, LLC (f/k/a Secured Resource Management, GP, LLC)


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.77

                                                                    Exhibit 3.77

                            CERTIFICATE OF FORMATION

                                       OF

                         LIVE OAK NURSING CENTER GP, LLC

     This Certificate of Formation of Live Oak Nursing Center GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Live Oak
Nursing Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.78

                                                                   Exhibit 3.78

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         LIVE OAK NURSING CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of Live
Oak Nursing Center GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Live Oak
Nursing Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Live Oak Nursing
          Center GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Live Oak Nursing Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.79

                                                                    Exhibit 3.79

                            CERTIFICATE OF FORMATION

                                       OF

               LOUISBURG HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Louisburg Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               LOUISBURG HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.80

                                                                    Exhibit 3.80

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
               LOUISBURG HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Louisburg Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Louisburg Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Louisburg Healthcare
     and Rehabilitation Center, LLC and shall be a security governed by Article
     8 of the Uniform Commercial Code as in effect in the State of Delaware and,
     to the extent permitted by applicable law, Article 8 of the Uniform
     Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5




     IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                         ADDRESS
- -------------                                         -------
                                                   
Louisburg Healthcare and Rehabilitation Center, LLC   1200 S. Broadway
                                                      Louisburg, Kansas 66053



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.81

                                                                    Exhibit 3.81

                            CERTIFICATE OF FORMATION

                                       OF

                           MONTEBELLO CARE CENTER, LLC

     This Certificate of Formation of Montebello Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is
Montebello Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.82

                                                                   Exhibit 3.82

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           MONTEBELLO CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Montebello Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Montebello Care Center, LLC
(the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Montebello Care
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                        3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                        4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                        5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                        6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        SUMMIT CARE CORPORATION,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

[Montebello Care Center, LLC Agreement]


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                      ADDRESS
- -------------                      -------
                                
Montebello Convalescent Hospital   1035 West Beverly Boulevard
                                   Montebello, California  90640



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Montebello Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

RE:  Management Agreement - Montebello Care Center, LLC

Ladies and Gentlemen:

     For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Montebello Care Center, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

     1. To accept such person's rights and authority as a Manager (as defined in
the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

     2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

     IN WITNESS WHEREOF, the undersigned have executed this Management Agreement
as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.83

                                                                    Exhibit 3.83

                            CERTIFICATE OF FORMATION

                                       OF

                         MONUMENT REHABILITATION GP, LLC

     This Certificate of Formation of Monument Rehabilitation GP, LLC, dated as
of July __, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Monument
Rehabilitation GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.84

                                                                   Exhibit 3.84

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         MONUMENT REHABILITATION GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Monument Rehabilitation GP, LLC (the "LLC"), is made and entered into effective
as of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Monument
Rehabilitation GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Monument
          Rehabilitation GP, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Monument Rehabilitation GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.85

                                                                    Exhibit 3.85

                            CERTIFICATE OF FORMATION

                                       OF

                        OAK CREST NURSING CENTER GP, LLC

     This Certificate of Formation of Oak Crest Nursing Center GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Oak Crest
Nursing Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.86

                                                                   Exhibit 3.86

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        OAK CREST NURSING CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of Oak
Crest Nursing Center GP, LLC (the "LLC"), is made and entered into effective as
of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Oak Crest
Nursing Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Oak Crest Nursing
          Center GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation

                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of Oak
Crest Nursing Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.87

                                                                    Exhibit 3.87

                            CERTIFICATE OF FORMATION

                                       OF

                              OAKLAND MANOR GP, LLC

     This Certificate of Formation of Oakland Manor GP, LLC, dated as of July 3,
2003, is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Oakland
Manor GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.88

                                                                   Exhibit 3.88

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                              OAKLAND MANOR GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Oakland Manor GP, LLC (the "LLC"), is made and entered into effective as of July
20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Oakland
Manor GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                    PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Oakland Manor GP,
          LLC and shall be a security governed by Article 8 of the Uniform
          Commercial Code as in effect in the State of Delaware and, to the
          extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Oakland Manor GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.89

                                                                    Exhibit 3.89

                            CERTIFICATE OF FORMATION

                                       OF

                PACIFIC HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Pacific Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                PACIFIC HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of August 8, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.90

                                                                   Exhibit 3.90

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                PACIFIC HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Pacific Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of August
15, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Pacific Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy Van Dran, as an authorized person, with the Secretary of State of the
State of Delaware on August 8, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                       1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Pacific
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                       3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                       4




          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary



                                      S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                   ADDRESS
- -------------                                   -------
                                             
Pacific Healthcare and Rehabilitation Center,   2211 Harrison Ave
LLC                                             Eureka, CA 95501



                                       A-1




                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.91

                                                                    Exhibit 3.91

                            CERTIFICATE OF FORMATION

                                       OF

               RICHMOND HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Richmond Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               RICHMOND HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.92

                                                                   Exhibit 3.92

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
               RICHMOND HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Richmond Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Richmond Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Richmond Healthcare
     and Rehabilitation Center, LLC and shall be a security governed by Article
     8 of the Uniform Commercial Code as in effect in the State of Delaware and,
     to the extent permitted by applicable law, Article 8 of the Uniform
     Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a
                                        California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                        ADDRESS
- -------------                                        -------
                                                  
Richmond Healthcare and Rehabilitation Center, LLC   340 E. South Street
                                                     Richmond, Kansas 66080



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.93

                                                                    EXHIBIT 3.93

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                   RIO HONDO SUBACUTE AND NURSING CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                   RIO HONDO SUBACUTE AND NURSING CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

         This Certificate of Conversion to Limited Liability Company, dated as
of July 19, 2004, is being duly executed and filed by Roland Rapp, as an
authorized person, to convert Rio Hondo Subacute and Nursing Center, LLC, a
California limited liability company, to Rio Hondo Subacute and Nursing Center,
LLC, a Delaware limited liability company, under the Delaware Limited Liability
Company Act (6 Del. C. Section 18-101, et seq.).

         1. Rio Hondo Subacute and Nursing Center, LLC was first formed on July
19, 2004. The jurisdiction of Rio Hondo Subacute and Nursing Center, LLC at the
time it was first formed was California.

         2. Rio Hondo Subacute and Nursing Center, LLC's name immediately prior
to the filing of this Certificate of Conversion to Limited Liability Company was
Rio Hondo Subacute and Nursing Center, LLC.

         3. The name of Rio Hondo Subacute and Nursing Center, LLC as set forth
in its certificate of formation is Rio Hondo Subacute and Nursing Center, LLC.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                   /s/ Roland Rapp
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person




                            CERTIFICATE OF FORMATION

                                       OF

                   RIO HONDO SUBACUTE AND NURSING CENTER, LLC

         This Certificate of Formation of Rio Hondo Subacute and Nursing Center,
LLC, dated as of July 19, 2004, is being duly executed and filed by Roland Rapp,
as an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is Rio
Hondo Subacute and Nursing Center, LLC.

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                              /s/
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person

EX-3.94

                                                                    Exhibit 3.94

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                   RIO HONDO SUBACUTE AND NURSING CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Rio Hondo Subacute and Nursing
Center, LLC (the "LLC"), is entered into by Summit Care Corporation, a Delaware
corporation, as the sole equity member (the "Member"), effective as of July 19,
2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Rio Hondo Subacute and
Nursing Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Rio Hondo
          Subacute and Nursing Center, LLC and shall be a security governed by
          Article 8 of the Uniform Commercial Code as in effect in the State of
          Delaware and, to the extent permitted by applicable law, Article 8 of
          the Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                       7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Rio Hondo Subacute and Nursing
Center, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.95

                                                                    Exhibit 3.95

                            CERTIFICATE OF FORMATION

                                       OF

               ROSSVILLE HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Rossville Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               ROSSVILLE HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.96

                                                                   Exhibit 3.96

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
               ROSSVILLE HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Rossville Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Rossville Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Rossville Healthcare
     and Rehabilitation Center, LLC and shall be a security governed by Article
     8 of the Uniform Commercial Code as in effect in the State of Delaware and,
     to the extent permitted by applicable law, Article 8 of the Uniform
     Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                             ADDRESS
- -------------                             -------
                                       
Rossville Healthcare and Rehabilitation   600 E. Perry
Center, LLC                               Rossville, Kansas 66533



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.97

                                                                    Exhibit 3.97

                            CERTIFICATE OF FORMATION

                                       OF

                           ROYALWOOD CARE CENTER, LLC

     This Certificate of Formation of Royalwood Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Royalwood
Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.98

                                                                    EXHIBIT 3.98

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           ROYALWOOD CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

      This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Royalwood Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

      The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

      Section 1.01 Name. The name of the LLC is Royalwood Care Center, LLC (the
"LLC").

      Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

      Section 1.03 Registered Office. The address of the registered office of
the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

      Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

      Section 1.05 Term. The LLC shall have a perpetual existence.

      Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.




                                   ARTICLE II.
                                     PURPOSE

      Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC
is to engage in the following activities:

            (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

            (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

      Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

            (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

            (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

            (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

            (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

            (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2


            (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

            (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

      Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

      Name and Address

      Summit Care Corporation
      27442 Portola Parkway, Suite 200
      Foothill Ranch, California  92610
      Attn:  Legal Department

      Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

      "This certificate evidences a membership interest in Royalwood Care
      Center, LLC and shall be a security governed by Article 8 of the
      Uniform Commercial Code as in effect in the State of Delaware and,
      to the extent permitted by applicable law, Article 8 of the Uniform
      Commercial Code of each other applicable jurisdiction."

      "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE
      NOT NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH
      THE TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY
      AGREEMENT. The Limited Liability Company maintains books for the
      purpose of registering transfers. This Certificate has not been and
      will not be registered under the Securities Act of 1933 or under the
      securities or blue sky laws of any state. The holder of this
      Certificate, by its acceptance hereof, represents that it is
      acquiring this security for investment and not with a view to any
      sale or distribution hereof."


                                       3


      This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

      Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

      Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

      Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                                   ARTICLE V.
                                    OFFICERS

      Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

            (a) be comprised minimally of a President, Chief Executive Officer,
Chief Financial Officer, Vice President, and Secretary;

            (b) be selected by the Member;

            (c) be allowed to serve on the Board of Managers;

            (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

            (e) meet at such times as may be necessary for the business of the
LLC.

      Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

      Boyd Hendrickson       Chief Executive Officer


                                       4


      Jose Lynch             President

      Kelly Atkins           Senior Vice President of Operations

      John Harrison          Chief Financial Officer

      Roland Rapp            Secretary

      Section 5.03 Chief Executive Officer. The Chief Executive Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Executive Officer, have general charge of the
business, affairs and property of the LLC and general supervision over the other
Officers and any of the LLC's employees and agents and see that all orders and
resolutions of the LLC are carried into effect.

      Section 5.04 President. The President shall, under the direction of the
Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

      Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

      Section 5.06 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

      Section 5.07 Secretary. The Secretary shall, under the direction of the
Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

            (a) record all the actions taken by the LLC's Member, Officers and
the Board of Managers in a book to be kept for that purpose;

            (b) if required, cause notices to be duly given in accordance with
the provisions of the Agreement and as required by statute;

            (c) be custodian of the records; and


                                       5


            (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

      The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

      Section 7.01 Assignments; Additions; Transfers; Dissolution.

            (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

            (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

            (c) Admission of Additional Members. One or more additional members
of the LLC may be admitted to the LLC with the written consent of the Member.

            (d) Dissolution. The LLC shall be dissolved, and its affairs shall
be wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.


                                       6


      Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

      Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

      Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

      Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

      Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]



                                       7



      IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                    MEMBER:

                                    SUMMIT CARE CORPORATION,
                                    a California corporation


                                    By:   /s/ Roland Rapp
                                          ------------------------------------
                                          Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY


PROPERTY NAME                            ADDRESS

Royalwood Care Center                    22520 Maple Avenue
                                         Torrance, California  90505


                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1



July 3, 2003

Royalwood Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California  92610

RE:   Management Agreement - Royalwood Care Center, LLC

Ladies and Gentlemen:

      For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Royalwood Care Center, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

      1. To accept such person's rights and authority as a Manager (as defined
in the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

      2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

      IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.

                                    /s/ Jose Lynch
                                    --------------------------------------------
                                    Jose Lynch

                                    /s/ John Harrison
                                    --------------------------------------------
                                    John Harrison

                                    /s/ Roland Rapp
                                    --------------------------------------------
                                    Roland Rapp

EX-3.99

                                                                    Exhibit 3.99

                            CERTIFICATE OF FORMATION

                                       OF

                SEAVIEW HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Seaview Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                SEAVIEW HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of August 8, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.100

                                                                   Exhibit 3.100


                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                SEAVIEW HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Seaview Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of August
15, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Seaview Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy Van Dran, as an authorized person, with the Secretary of State of the
State of Delaware on August 8, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                       1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California  92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Seaview
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                       3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer


                                       4



          Jose Lynch         President

          Kelly Atkins       Senior Vice President of Operations

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

          Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and


                                       5



               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6



          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                            ADDRESS
- -------------                                            -------
                                                 
Seaview Healthcare and Rehabilitation Center, LLC   6400 Purdue
                                                    Eureka, CA 95503



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.101

                                                                   Exhibit 3.101

                            CERTIFICATE OF FORMATION

                                       OF

                             SHARON CARE CENTER, LLC

     This Certificate of Formation of Sharon Care Center, LLC, dated as of July
3, 2003, is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Sharon
Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.102

                                                                   Exhibit 3.102

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                             SHARON CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

            This Limited Liability Company Operating Agreement (together with
the exhibits attached hereto, this "Agreement") of Sharon Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

            The Member, by execution of this Agreement, hereby forms the LLC as
a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

            Section 1.01 Name. The name of the LLC is Sharon Care Center, LLC
(the "LLC").

            Section 1.02 Principal Business Office. The principal business
office of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill
Ranch, California 92610 or such other location as may hereafter be determined by
the Member.

            Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

            Section 1.04 Registered Agent. The name and address of the
registered agent of the LLC for service of process on the LLC in the State of
Delaware is National Registered Agents, Inc., 9 East Loockerman Street, Suite
1B, Dover, Delaware 19901.

            Section 1.05 Term. The LLC shall have a perpetual existence.

            Section 1.06 Certificate of Formation. The LLC was formed as a
limited liability company under the Act by the filing of a Certificate of
Formation by Sally G. Burns, as an authorized person, with the Secretary of
State of the State of Delaware on July 3, 2003, as the same may be amended,
restated or supplemented from time to time. Upon the filing of the Certificate
of Formation with the Secretary of State of the State of Delaware, her powers as
an "authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

            Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

                  (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

                  (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

            Section 3.01 Board of Managers. Pursuant to Section 18-402 of the
Act, and to the extent specifically set forth in this Agreement, certain
activities of the LLC shall be managed through a Board of Managers (the "Board
of Managers"). The Board of Managers shall have the following characteristics:

                  (a) the Board of Managers shall be composed of no less than
three individuals (each, a "Manager").

                  (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

                  (c) all actions of the Board of Managers shall require a
majority vote of the quorum of the Managers; provided, however, that the Board
of Managers may delegate the day-to-day management of the LLC to an
individual(s) or entity which may or may not be a Manager;

                  (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

                  (e) the Member may remove any Manager for any reason or no
reason by executing a certificate setting forth the Manager being removed and
the replacement Manager;


                                       2

                  (f) in the event there exists a vacancy on the Board of
Managers, the Member shall, as soon as reasonably practicable, execute a
certificate setting forth a replacement Manager; and

                  (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

            Section 4.01 Member. Simultaneously with the execution and delivery
of this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

            Name and Address

            Summit Care Corporation
            27442 Portola Parkway, Suite 200
            Foothill Ranch, California  92610
            Attn:  Legal Department

            Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

            "This certificate evidences a membership interest in Sharon Care
            Center, LLC and shall be a security governed by Article 8 of the
            Uniform Commercial Code as in effect in the State of Delaware and,
            to the extent permitted by applicable law, Article 8 of the Uniform
            Commercial Code of each other applicable jurisdiction."

            "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE
            NOT NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH
            THE TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY
            AGREEMENT. The Limited Liability Company maintains books for the
            purpose of registering transfers. This Certificate has not been and
            will not be registered under the Securities Act of 1933 or under the
            securities or blue sky laws of any state. The holder of this
            Certificate, by its acceptance hereof, represents that it is
            acquiring this security for investment and not with a view to any
            sale or distribution hereof."

            This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       3

            Section 4.03 Powers. The Member shall have the right and authority
to take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

            Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

            Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

            Section 5.01 Officers. The day-to-day operation of the business of
the LLC shall be managed by officers (the "Officers") to the extent specifically
set forth in this Agreement and under the direction of the Member and the Board
of Managers. The Officers shall:

                  (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

                  (b) be selected by the Member;

                  (c) be allowed to serve on the Board of Managers;

                  (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

                  (e) meet at such times as may be necessary for the business of
the LLC.

            Section 5.02 Initial Officers. The initial Officers shall take
office upon the execution of this Agreement by the Member and shall be:

            Boyd Hendrickson       Chief Executive Officer

            Jose Lynch             President


                                       4

            Kelly Atkins           Senior Vice President of Operations

            John Harrison          Chief Financial Officer

            Roland Rapp            Secretary

            Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

            Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

            Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

            Section 5.06 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

            Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

                  (a) record all the actions taken by the LLC's Member, Officers
and the Board of Managers in a book to be kept for that purpose;

                  (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

                  (c) be custodian of the records; and


                                       5

                  (d) see that all of the books, reports, statements,
certificates and all other documents and records required to be kept by statute
or this Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

            The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

            Section 7.01 Assignments; Additions; Transfers; Dissolution.

                  (a) Assignments. The Member may, with prior written notice to
the LLC and in compliance with applicable laws, sell assign or convey its
Membership Interests at any time without the consent of the Managers. If the
Member transfers all of its Membership Interests pursuant to this Section
7.01(a), the transferee shall be admitted to the LLC as a member of the LLC upon
its execution of an instrument signifying its agreement to be bound by the terms
and conditions of this Agreement, which instrument may be a counterpart
signature page to this Agreement. Such admission shall be deemed effective
immediately prior to the transfer and, immediately following such admission, the
transferor Member shall cease to be a member of the LLC. Any successor to a
Member by merger or consolidation shall, without further act, be the Member
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the LLC shall continue without dissolution.

                  (b) Resignation. If the Member resigns pursuant to this
Section 7.01(b), an additional member of the LLC may be admitted to the LLC,
subject to Sections 7.01(c), upon its execution of an instrument signifying its
agreement to be bound by the terms and conditions of this Agreement, which
instrument may be a counterpart signature page to this Agreement. Such admission
shall be deemed effective immediately prior to the resignation and, immediately
following such admission, the resigning Member shall cease to be a member of the
LLC.

                  (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

                  (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.


                                       6

            Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

            Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

            Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

            Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

            Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]




                                       7

            IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                    MEMBER:

                                    SUMMIT CARE CORPORATION,
                                    a California corporation

                                    By:   /s/ Roland Rapp
                                          ----------------------
                                          Roland Rapp, Secretary




                                       S-1

[Sharon Care Center, LLC Agreement]

                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                            ADDRESS
- --------------------------------------------------------------------------------
                                      
Sharon Care Center                       8167 West 3rd Street
                                         Los Angeles, California  90048





                                       A-1

                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp




                                       B-1

July 3, 2003

Sharon Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California  92610

RE:   Management Agreement - Sharon Care Center, LLC

Ladies and Gentlemen:

      For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Sharon Care Center, LLC, a Delaware
limited liability company (the "Company"), in accordance with the Limited
Liability Company Operating Agreement of the Company, as it may be amended or
restated from time to time (the "LLC Agreement"), hereby agree:

      1. To accept such person's rights and authority as a Manager (as defined
in the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

      2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

      IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.

                                    /s/ Jose Lynch
                                    --------------------------------------------
                                    Jose Lynch

                                    /s/ John Harrison
                                    --------------------------------------------
                                    John Harrison

                                    /s/ Roland Rapp
                                    --------------------------------------------
                                    Roland Rapp

EX-3.103

                                                                   Exhibit 3.103

                            CERTIFICATE OF FORMATION

                                       OF

            SHAWNEE GARDENS HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Shawnee Gardens Healthcare and
Rehabilitation Center, LLC is being duly executed and filed by an authorized
person to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

            SHAWNEE GARDENS HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.104

                                                                   Exhibit 3.104

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
            SHAWNEE GARDENS HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Shawnee Gardens Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Shawnee Gardens Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                        2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Shawnee Gardens
     Healthcare and Rehabilitation Center, LLC and shall be a security governed
     by Article 8 of the Uniform Commercial Code as in effect in the State of
     Delaware and, to the extent permitted by applicable law, Article 8 of the
     Uniform Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                        3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                        4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                   ADDRESS
- -------------                                   -------
                                             
Shawnee Gardens Healthcare and Rehabilitation   6416 Long Street
Center, LLC                                     Shawnee, Kansas 66216



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.105

                                                                   Exhibit 3.105

                            CERTIFICATE OF FORMATION
                                       OF
                             SKILLED HEALTHCARE, LLC

     This Certificate of Formation of Skilled Healthcare, LLC, dated as of June
25, 2003 is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Skilled
Healthcare, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns, Authorized Person

EX-3.106

                                                                   Exhibit 3.106

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                             SKILLED HEALTHCARE, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Skilled Healthcare, LLC (the
"LLC"), is entered into by Fountain View, Inc., a Delaware corporation, as the
sole equity member (the "Member"), effective as of July 3, 2003 (the "Effective
Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Skilled Healthcare, LLC (the
"LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
State of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no


                                        2



Manager shall be obligated for any such debt, obligation or liability of the LLC
solely by reason of its acting as a Manager of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Skilled
          Healthcare, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. The debts,
obligations and liabilities of the LLC, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the LLC,
and the Member shall not be obligated for any such debt, obligation or liability
of the LLC solely by reason of its status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.


                                        3



                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Executive
Officer, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Boyd Hendrickson   Chief Executive Officer

          Jose Lynch         President

          John Harrison      Chief Financial Officer

          Roland Rapp        Secretary

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties


                                        4



incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

          Section 5.06 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          To the fullest extent permitted by law, the Company shall indemnify
and hold harmless (i) the Member, (ii) any affiliate of the Member, and (iii)
any officer, director, employee, or agent of the Company, the Member or any of
its affiliates, (each, an "Indemnitee"), from and against any claim, loss,
damage, liability, or reasonable expense (including reasonable attorneys' fees,
court costs, and costs of investigation and appeal) suffered or incurred by any
such Indemnitee by reason of, or arising from, the operations, business, or
affairs of, or any action taken or failure to act on behalf of, the Company.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without


                                        5



further act, be the Member hereunder, and such merger or consolidation shall not
constitute an assignment for purposes of this Agreement and the LLC shall
continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        6



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Fountain View, Inc.,
                                        a Delaware corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

[Skilled Healthcare, LLC Agreement]


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       A-1



July 3, 2003

Skilled Healthcare, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

     Re: Management Agreement - Skilled Healthcare, LLC

Ladies and Gentlemen:

          For good and valuable consideration, each of the undersigned persons,
who have been designated as initial Managers of Skilled Healthcare, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

          1. To accept such person's rights and authority as a Manager (as
defined in the LLC Agreement) under the LLC Agreement and to perform and
discharge such person's duties and obligations as a Manager under the LLC
Agreement and agrees that such rights, authority, duties and obligations under
the LLC Agreement shall continue until such person's successor as a Manager is
designated or until such person's resignation or removal as a Manager in
accordance with the LLC Agreement. A Manager is designated as a "manager" of the
Company within the meaning of the Delaware Limited Liability Company Act.

          2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

          IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.


                                        /s/ Jose Lynch
                                        ----------------------------------------
                                        Jose Lynch


                                        /s/ John Harrison
                                        ----------------------------------------
                                        John Harrison


                                        /s/ Roland Rapp
                                        ----------------------------------------
                                        Roland Rapp

EX-3.107

                                                                   Exhibit 3.107

                            CERTIFICATE OF FORMATION

                                       OF

                         SOUTHWEST PAYROLL SERVICES, LLC

     This Certificate of Formation of Southwest Payroll Services, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                         SOUTHWEST PAYROLL SERVICES, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 5, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.108

                                                                   Exhibit 3.108

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         SOUTHWEST PAYROLL SERVICES, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Southwest Payroll Services, LLC
(the "LLC"), is entered into by Skilled Healthcare Group, Inc. f/k/a Fountain
View, Inc., as the sole equity member (the "Member"), effective as of January 1,
2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Southwest Payroll Services,
LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 5, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                       1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                       2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Southwest Payroll
          Services, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise


                                       3



deems necessary, useful or appropriate for the day-to-day management and conduct
of the LLC's business and which are not otherwise specifically reserved to the
Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Financial
Officer, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Jose Lynch      President

          John Harrison   Chief Financial Officer

          Roland Rapp     Secretary


                                       4



          Section 5.03 President. The President shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

          Section 5.04 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Financial Officer and shall have such
powers and discharge such duties as may be assigned to him or her, from time to
time, by the other Officers, Board of Managers or the Member.

          Section 5.05 Secretary. The Secretary shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                 MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a


                                       5



member of the LLC upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the transfer and, immediately following
such admission, the transferor Member shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       6



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Skilled Healthcare Group, Inc.,
                                        a Delaware corporation


                                        By: /s/ Jose Lynch
                                            ------------------------------------
                                            Jose Lynch, President


                                      S-1



                                    EXHIBIT A

                              [INTENTIONALLY BLANK]


                                      A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.109

                                                                   Exhibit 3.109

                            CERTIFICATE OF FORMATION

                                       OF

                          SOUTHWOOD CARE CENTER GP, LLC

     This Certificate of Formation of Southwood Care Center GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Southwood
Care Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.110

                                                                   Exhibit 3.110

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          SOUTHWOOD CARE CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Southwood Care Center GP, LLC (the "LLC"), is made and entered into effective as
of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Southwood
Care Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                    PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Southwood Care
          Center GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Southwood Care Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.111

                                                                   Exhibit 3.111

                            CERTIFICATE OF FORMATION

                                       OF

                       SPRING SENIOR ASSISTED LIVING, LLC

     This Certificate of Formation of Spring Senior Assisted Living, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Spring
Senior Assisted Living, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.112

                                                                   Exhibit 3.112

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                       SPRING SENIOR ASSISTED LIVING, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Spring Senior Assisted Living, LLC (the "LLC"), is made and entered into
effective as of July 19, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Spring
Senior Assisted Living, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Spring Senior
          Assisted Living, LLC and shall be a security governed by Article 8 of
          the Uniform Commercial Code as in effect in the State of Delaware and,
          to the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Spring Senior Assisted Living, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.113

                                                                   Exhibit 3.113

                            CERTIFICATE OF FORMATION

                                       OF

             ST. ELIZABETH HEALTHCARE AND REHABILITATION CENTER, LLC


     This Certificate of Formation of St. Elizabeth Healthcare and
Rehabilitation Center, LLC is being duly executed and filed by an authorized
person to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

             ST. ELIZABETH HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of September 10, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.114

                                                                   Exhibit 3.114

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
             ST. ELIZABETH HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of St. Elizabeth Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of September
10, 2004 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is St. Elizabeth Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on September 10, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in St. Elizabeth
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                        3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Financial
Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Jose Lynch      President


                                       4



          Kelly Atkins    Senior Vice President of Operations

          John Harrison   Chief Financial Officer

          Roland Rapp     Secretary

          Section 5.03 President. The President shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

          Section 5.04 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member and Board of
Managers, perform all duties incident to the office of Senior Vice President of
Operations and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, Board of
Managers or the Member.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Financial Officer and shall have such
powers and discharge such duties as may be assigned to him or her, from time to
time, by the other Officers, Board of Managers or the Member.

          Section 5.06 Secretary. The Secretary shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation


                                        5



and appeal) suffered or incurred by any such Indemnitee by reason of, or arising
from, the operations, business, or affairs of, or any action taken or failure to
act on behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and


                                        6



enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Jose Lynch
                                            ------------------------------------
                                            Jose Lynch, President


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                             ADDRESS
- -------------                                             -------
                                                       
St. Elizabeth Healthcare and Rehabilitation Center, LLC   2800 North Harbor Blvd.
                                                          Fullerton, CA 92835



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.115

                                                                   Exhibit 3.115

                            CERTIFICATE OF FORMATION

                                       OF

               ST. LUKE HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of St. Luke Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               ST. LUKE HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 5, 2003.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.116

                                                                   Exhibit 3.116

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
               ST. LUKE HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of St. Luke Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
17, 2003 (the "Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is St. Luke Healthcare and
Rehabilitation Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 5, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.


                                        1



                                   ARTICLE II.
                                     PURPOSE

          Section 2.01 Purpose. The purpose to be conducted or promoted by the
LLC is to engage in the following activities:

               (a) managing and operating the health care facility located on
the real property described on Exhibit A attached hereto and incorporated herein
by this reference, including leasing such real property (the "Facility
Operations"); and

               (b) engaging in any lawful act or activity and exercising any
powers permitted to limited liability companies organized under the laws of the
State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit B
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in St. Luke
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."


                                        3



          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.03 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.04 Liability. The Member shall not have any liability for
the obligations of the LLC except to the extent provided herein. Except as
required by the Act, the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and the Member shall not be obligated for any such
debt, obligation or liability of the LLC solely by reason of its status as the
Member of the LLC.

          Section 4.05 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is neither reasonably necessary for the operation of the
LLC nor the performance of its contractual obligations, nor which is in
violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised minimally of a President, Chief Financial
Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The initial Officers shall take office
upon the execution of this Agreement by the Member and shall be:

          Jose Lynch      President


                                        4



          Kelly Atkins    Senior Vice President of Operations

          John Harrison   Chief Financial Officer

          Roland Rapp     Secretary

          Section 5.03 President. The President shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

          Section 5.04 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member and Board of
Managers, perform all duties incident to the office of Senior Vice President of
Operations and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, Board of
Managers or the Member.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Financial Officer and shall have such
powers and discharge such duties as may be assigned to him or her, from time to
time, by the other Officers, Board of Managers or the Member.

          Section 5.06 Secretary. The Secretary shall, under the direction of
the Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member, Officers and the
Board of Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation


                                        5



and appeal) suffered or incurred by any such Indemnitee by reason of, or arising
from, the operations, business, or affairs of, or any action taken or failure to
act on behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and


                                        6



enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        7



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                        ADDRESS
- -------------                                        -------
                                                  
St. Luke Healthcare and Rehabilitation Center, LLC   2321 Newburg Road
                                                     Fortuna, CA 95540



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.117

                                                                   EXHIBIT 3.117

             CERTIFICATE OF CONVERSION TO LIMITED LIABILITY COMPANY
                                       OF
                         SYCAMORE PARK CARE CENTER, LLC
                    (A CALIFORNIA LIMITED LIABILITY COMPANY)
                                       TO
                         SYCAMORE PARK CARE CENTER, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

      This Certificate of Conversion to Limited Liability Company, dated as of
July 19, 2004, is being duly executed and filed by Roland Rapp, as an authorized
person, to convert Sycamore Park Care Center, LLC, a California limited
liability company, to Sycamore Park Care Center, LLC, a Delaware limited
liability company, under the Delaware Limited Liability Company Act (6 Del. C.
Section 18-101, et seq.).

      1. Sycamore Park Care Center, LLC was first formed on July 19, 2004. The
jurisdiction of Sycamore Park Care Center, LLC at the time it was first formed
was California.

      2. Sycamore Park Care Center, LLC's name immediately prior to the filing
of this Certificate of Conversion to Limited Liability Company was Sycamore Park
Care Center, LLC.

      3. The name of Sycamore Park Care Center, LLC as set forth in its
certificate of formation is Sycamore Park Care Center, LLC.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Conversion to Limited Liability Company as of the date first written above.

                                   /s/ Roland Rapp
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person




                            CERTIFICATE OF FORMATION
                                       OF
                         SYCAMORE PARK CARE CENTER, LLC

         This Certificate of Formation of Sycamore Park Care Center, LLC, dated
as of July 19, 2004, is being duly executed and filed by Roland Rapp, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is
Sycamore Park Care Center, LLC.

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.

                                              /s/
                                   --------------------------------------------
                                   Roland Rapp
                                   Authorized Person

EX-3.118

                                                                   Exhibit 3.118

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         SYCAMORE PARK CARE CENTER, LLC

                      A DELAWARE LIMITED LIABILITY COMPANY

          This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Sycamore Park Care Center, LLC
(the "LLC"), is entered into by Summit Care Corporation, a Delaware corporation,
as the sole equity member (the "Member"), effective as of July 19, 2004 (the
"Effective Date").

          The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC is Sycamore Park Care Center,
LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 2744 Portola Parkway, Suite 200, Foothill Ranch,
California, 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation with
the Secretary of State of the State of Delaware on July 19, 2004, as the same
may be amended, restated or supplemented from time to time. The Member or an
Officer (as defined herein) shall execute, deliver and file any other
certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in any jurisdiction in which the
LLC may wish to conduct business. The existence of the LLC as a separate legal
entity shall continue until cancellation of the Certificate of Formation as
provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the initial Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system, and actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and


                                        2



               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in the LLC shall be securities governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and each other applicable
jurisdiction. The Unit Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Sycamore Park
          Care Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in


                                        3



violation of Sections 18-607 or 18-804 of the Act or any contractual agreement
binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Initial Officers. The Member may elect one person to more
than one position. The initial Officers shall take office upon the execution of
this Agreement by the Member and shall be:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.

          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.


                                        4



          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding,


                                        5



whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a Manager or agent of the LLC, shall be indemnified and held
harmless by the LLC to the fullest extent legally permissible against all
expenses, liabilities and losses (including attorney's fees and disbursements),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Person in connection with such action, suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such Person as a Manager. Notwithstanding the foregoing
sentence, a Manager shall be liable (i) for breach of the Manager's duty of
loyalty to the LLC or the Member, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law or (iii)
for any transaction from which the Manager derived an improper personal benefit.
No amendment to or repeal of this Section 6.01(e) shall apply to or have any
effect on the liability or alleged liability of any Manager of the LLC for or
with respect to any acts or omissions of such Manager occurring prior to such
amendment.


                                        6



               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is continued without
dissolution in a manner permitted by this Agreement or the Act, (ii) an
agreement of all Members to dissolve the LLC, or (iii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        7



          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Lmited Liability Company Operating Agreement of Sycamore Park Care Center, LLC


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.119

                                                                   Exhibit 3.119

                            CERTIFICATE OF FORMATION

                                       OF

                       TEXAS CITYVIEW CARE CENTER GP, LLC

     This Certificate of Formation of Texas Cityview Care Center GP, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Texas
Cityview Care Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.120

                                                                   Exhibit 3.120

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                       TEXAS CITYVIEW CARE CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Texas Cityview Care Center GP, LLC (the "LLC"), is made and entered into
effective as of July 20, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Texas
Cityview Care Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                    PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;

                                        2




               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Texas Cityview
          Care Center GP, LLC and shall be a security governed by Article 8 of
          the Uniform Commercial Code as in effect in the State of Delaware and,
          to the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Texas Cityview Care Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.121

                                                                   Exhibit 3.121

                            CERTIFICATE OF FORMATION

                                       OF

          TEXAS HERITAGE OAKS NURSING AND REHABILITATION CENTER GP, LLC

     This Certificate of Formation of Texas Heritage Oaks Nursing and
Rehabilitation Center GP, LLC, dated as of July 3, 2003, is being duly executed
and filed by Sally G. Burns, as an authorized person, to form a limited
liability company under the Delaware Limited Liability Company Act (6 Del.C.
Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Texas
Heritage Oaks Nursing and Rehabilitation Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.122

                                                                   Exhibit 3.122

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
          TEXAS HERITAGE OAKS NURSING AND REHABILITATION CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC (the "LLC"), is
made and entered into effective as of July 20, 2004 (the "Effective Date"), by
Summit Care Corporation, a California corporation, as the sole equity member
(the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Texas
Heritage Oaks Nursing and Rehabilitation Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                   PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Texas Heritage
          Oaks Nursing and Rehabilitation Center GP, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.123

                                                                   Exhibit 3.123

                            CERTIFICATE OF FORMATION

                                       OF

                           THE CLAIRMONT TYLER GP, LLC

     This Certificate of Formation of The Clairmont Tyler GP, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is The
Clairmont Tyler GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.124

                                                                   Exhibit 3.124

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           THE CLAIRMONT TYLER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of The
Clairmont Tyler GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is The
Clairmont Tyler GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                    PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in The Clairmont
          Tyler GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of The
Clairmont Tyler GP, LLC


                                       S-1




                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.125

                                                                   Exhibit 3.125

                            CERTIFICATE OF FORMATION

                                       OF

                                THE EARLWOOD, LLC

     This Certificate of Formation of The Earlwood, LLC, dated as of July 3,
2003, is being duly executed and filed by Sally G. Burns, as an authorized
person, to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is The
Earlwood, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.126

                                                                   Exhibit 3.126

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                                THE EARLWOOD, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of The
Earlwood, LLC (the "LLC"), is made and entered into effective as of July 19,
2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is The
Earlwood, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to
qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The



existence of the LLC as a separate legal entity shall continue until
cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in The Earlwood, LLC
          and shall be a security governed by Article 8 of the Uniform
          Commercial Code as in effect in the State of Delaware and, to the
          extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of The
Earlwood, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.127

                                                                   Exhibit 3.127

                            CERTIFICATE OF FORMATION

                                       OF

                  THE REHABILITATION CENTER OF SUMMERLIN , LLC

         This Certificate of Formation of The Rehabilitation Center of
Summerlin, LLC is being duly executed and filed by an authorized person to form
a limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is:

                   THE REHABILITATION CENTER OF SUMMERLIN, LLC

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

                           NATIONAL REGISTERED AGENTS, INC.
                           9 EAST LOOCKERMAN STREET, SUITE 1B
                           DOVER, KENT COUNTY, DELAWARE, 19901

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of July 29, 2004.

                                              /s/ Cindy M. VanDran
                                              --------------------------
                                              Cindy M. VanDran
                                              Authorized Person

                                STATE OF DELAWARE
                            CERTIFICATE OF AMENDMENT

                                       FOR

                   THE REHABILITATION CENTER OF SUMMERLIN, LLC

     FIRST. The name of the limited liability company is:

                   THE REHABILITATION CENTER OF SUMMERLIN, LLC

     SECOND. The Certificate of Formation of the limited liability company is
hereby amended to change the name to:

                          THE HEIGHTS OF SUMMERLIN, LLC

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of September 17, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.128

                                                                   Exhibit 3.128

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          THE HEIGHTS OF SUMMERLIN, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of The Heights of Summerlin, LLC (the "LLC"),
is entered into by Summit Care Corporation, as the sole equity member (the
"Member"), effective as of September 20, 2004 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is The Heights of Summerlin, LLC
(the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on September 20, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address

     Summit Care Corporation
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in The Heights of
     Summerlin, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware


                                        2



     and, to the extent permitted by applicable law, Article 8 of the Uniform
     Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John Harrison   Chief Financial Officer

     Roland Rapp     Secretary


                                        3



     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution.

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.


                                        4



          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                   ADDRESS
- -------------                   -------
                             
The Heights of Summerlin, LLC   10550 Park Run Drive
                                Las Vegas, NV 89144



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1

EX-3.129

                                                                   Exhibit 3.129

                            CERTIFICATE OF FORMATION

                                       OF

                     THE WOODLANDS HEALTHCARE CENTER GP, LLC

     This Certificate of Formation of The Woodlands Healthcare Center GP, LLC,
dated as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as
an authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is The
Woodlands Healthcare Center GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.130

                                                                   Exhibit 3.130

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                     THE WOODLANDS HEALTHCARE CENTER GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of The
Woodlands Healthcare Center GP, LLC (the "LLC"), is made and entered into
effective as of July 20, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is The
Woodlands Healthcare Center GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in The Woodlands
          Healthcare Center GP, LLC and shall be a security governed by Article
          8 of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of The
Woodlands Healthcare Center GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.131

                                                                   Exhibit 3.131

                            CERTIFICATE OF FORMATION

                                       OF

                         TOWN AND COUNTRY MANOR GP, LLC

     This Certificate of Formation of Town and Country Manor GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Town and
Country Manor GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.132

                                                                   Exhibit 3.132

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         TOWN AND COUNTRY MANOR GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY


          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of Town
and Country Manor GP, LLC (the "LLC"), is made and entered into effective as of
July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a California
corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Town and
Country Manor GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                    PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Town and Country
          Manor GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Town and Country Manor GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.133

                                                                   Exhibit 3.133

                            CERTIFICATE OF FORMATION

                                       OF

                            TRAVELMARK STAFFING, LLC

     This Certificate of Formation of Travelmark Staffing, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                            TRAVELMARK STAFFING, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of February 11, 2005.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.134

                                                                   Exhibit 3.134

           FIRST AMENDED LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            TRAVELMARK STAFFING, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This First Amended Limited Liability Company Operating Agreement (together
with the exhibits attached hereto, this "Agreement") of Travelmark Staffing, LLC
(the "LLC"), is entered into by Hallmark Investment Group, Inc., as the sole
equity member (the "Member"), effective as of February 12, 2005 (the "Effective
Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Travelmark Staffing, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 160
Greentree Drive, Suite 101, Dover, Delaware 19904.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover,
Delaware 19904.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on February 11, 2005, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities: engaging in any lawful act or activity
and exercising any powers permitted to limited liability companies organized
under the laws of the State of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:


                                       1



          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit A attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Hallmark Investment Group, Inc.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Travelmark Staffing,
     LLC and shall be a security governed by Article 8 of the Uniform Commercial
     Code as in effect in the State of Delaware and, to the extent permitted by
     applicable law, Article 8 of the Uniform Commercial Code of each other
     applicable jurisdiction."


                                       2



     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Treasurer, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Mark Wortley   President and Chief Executive Officer

     John King      Treasurer and Chief Financial Officer

     Roland Rapp    Secretary and Chief Administrative Officer


                                       3



     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.05 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution


                                       4



of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the resignation and, immediately following such admission, the
resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Hallmark Investment Group, Inc.,
                                        a Delaware corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                      S-1



                                    EXHIBIT A

                                INITIAL MANAGERS

Mark Wortley

John King

Roland Rapp


                                      A-1

EX-3.135

                                                                   Exhibit 3.135

                            CERTIFICATE OF FORMATION

                                       OF

                          VALLEY HEALTHCARE CENTER, LLC

     This Certificate of Formation of Valley Healthcare Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Valley
Healthcare Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.136

                                                                   Exhibit 3.136

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          VALLEY HEALTHCARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Valley Healthcare Center, LLC (the "LLC"), is made and entered into effective as
of July 19, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Valley
Healthcare Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                        2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Valley Healthcare
          Center, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                        3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                        4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                        5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                        6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                        7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                        8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Valley Healthcare Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.137

                                                                   Exhibit 3.137

                            CERTIFICATE OF FORMATION

                                       OF

                       VILLA MARIA HEALTHCARE CENTER, LLC

     This Certificate of Formation of Villa Maria Healthcare Center, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Villa
Maria Healthcare Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.138

                                                                   Exhibit 3.138

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                       VILLA MARIA HEALTHCARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Villa Maria Healthcare Center, LLC (the "LLC"), is made and entered into
effective as of July 19, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Villa Maria
Healthcare Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                  ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Villa Maria
          Healthcare Center, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                  ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Villa Maria Healthcare Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.139

                                                                   Exhibit 3.139

                            CERTIFICATE OF FORMATION

                                       OF

                          VINTAGE PARK AT ATCHISON, LLC

     This Certificate of Formation of Vintage Park at Atchison, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                          VINTAGE PARK AT ATCHISON, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.140

                                                                   Exhibit 3.140

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          VINTAGE PARK AT ATCHISON, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Atchison, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Atchison, LLC
(the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Atchison, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



     IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                   ADDRESS
- -------------                   -------
                             
Vintage Park at Atchison, LLC   1301 N. Fourth Street
                                Atchison, Kansas 66002



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.141

                                                                   Exhibit 3.141

                            CERTIFICATE OF FORMATION

                                       OF

                        VINTAGE PARK AT BALDWIN CITY, LLC

     This Certificate of Formation of Vintage Park at Baldwin City, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                        VINTAGE PARK AT BALDWIN CITY, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.142

                                                                   Exhibit 3.142

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        VINTAGE PARK AT BALDWIN CITY, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Baldwin City, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Baldwin City, LLC
(the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                       1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                       2


the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Vintage Park at
          Baldwin City, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                       4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY


PROPERTY NAME                       ADDRESS
- ---------------------------------   --------------------------
                                 
Vintage Park at Baldwin City, LLC   321 Crimson Avenue
                                    Baldwin City, Kansas 66006



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.143

                                                                   Exhibit 3.143

                            CERTIFICATE OF FORMATION

                                       OF

                          VINTAGE PARK AT GARDNER, LLC

     This Certificate of Formation of Vintage Park at Gardner, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                          VINTAGE PARK AT GARDNER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.144

                                                                   Exhibit 3.144

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          VINTAGE PARK AT GARDNER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Gardner, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Gardner, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Gardner, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                  ADDRESS
- -------------                  -------
                            
Vintage Park at Gardner, LLC   869 Junniper Terrace
                               Gardner, Kansas 66030



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp

                                       B-1

EX-3.145

                                                                   Exhibit 3.145

                            CERTIFICATE OF FORMATION

                                       OF

                           VINTAGE PARK AT LENEXA, LLC

     This Certificate of Formation of Vintage Park at Lenexa, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                           VINTAGE PARK AT LENEXA, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.146

                                                                   Exhibit 3.146

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           VINTAGE PARK AT LENEXA, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Lenexa, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Lenexa, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                       1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                       2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Lenexa, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                       3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                          ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                       4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                 ADDRESS
- -------------                 -------
                           
Vintage Park at Lenexa, LLC   8710 Caenen Lake Road Lenexa, Kansas 66216



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.147

                                                                   Exhibit 3.147

                            CERTIFICATE OF FORMATION

                                       OF

                         VINTAGE PARK AT LOUISBURG, LLC

     This Certificate of Formation of Vintage Park at Louisburg, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                         VINTAGE PARK AT LOUISBURG, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.148

                                                                   Exhibit 3.148

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         VINTAGE PARK AT LOUISBURG, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Louisburg, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Louisburg, LLC
(the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                       1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                       2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Louisburg, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                       3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                       4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                    ADDRESS
- -------------                    -------
                              
Vintage Park at Louisburg, LLC   202 Rogers Road Louisburg, Kansas 66053



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.149

                                                                   Exhibit 3.149

                            CERTIFICATE OF FORMATION

                                       OF

                         VINTAGE PARK AT OSAWATOMIE, LLC

     This Certificate of Formation of Vintage Park at Osawatomie, LLC is being
duly executed and filed by an authorized person to form a limited liability
company under the Delaware Limited Liability Company Act (6 Del.C. Section
18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

                         VINTAGE PARK AT OSAWATOMIE, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.150

                                                                   Exhibit 3.150

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                         VINTAGE PARK AT OSAWATOMIE, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Osawatomie, LLC
(the "LLC"), is entered into by Summit Care Corporation, as the sole equity
member (the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Osawatomie, LLC
(the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Osawatomie, LLC and shall be a security governed by Article 8 of the
     Uniform Commercial Code as in effect in the State of Delaware and, to the
     extent permitted by applicable law, Article 8 of the Uniform Commercial
     Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

     The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                     ADDRESS
- -------------                     -------
                               
Vintage Park at Osawatomie, LLC   1520 Parker
                                  Osawatomie, Kansas 66064



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.151

                                                                   Exhibit 3.151

                            CERTIFICATE OF FORMATION

                                       OF

                           VINTAGE PARK AT OTTAWA, LLC

     This Certificate of Formation of Vintage Park at Ottawa, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                           VINTAGE PARK AT OTTAWA, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.152

                                                                   Exhibit 3.152

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           VINTAGE PARK AT OTTAWA, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Ottawa, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Ottawa, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

          Section 4.02 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate issued to the Member (the "Unit
Certificate"). The Member hereby irrevocably elects that all Membership
Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Ottawa, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a
                                        California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                 ADDRESS
- -------------                 -------
                           
Vintage Park at Ottawa, LLC   23rd & US Highway 59
                              Ottawa, Kansas 66067



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.153

                                                                   Exhibit 3.153

                            CERTIFICATE OF FORMATION

                                       OF

                           VINTAGE PARK AT PAOLA, LLC

     This Certificate of Formation of Vintage Park at Paola, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                           VINTAGE PARK AT PAOLA, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.154

                                                                   Exhibit 3.154

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           VINTAGE PARK AT PAOLA, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Paola, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Paola, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at Paola,
     LLC and shall be a security governed by Article 8 of the Uniform Commercial
     Code as in effect in the State of Delaware and, to the extent permitted by
     applicable law, Article 8 of the Uniform Commercial Code of each other
     applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                ADDRESS
- -------------                -------
                          
Vintage Park at Paola, LLC   601 N. East
                             Paola, Kansas 66071



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.155

                                                                   Exhibit 3.155

                            CERTIFICATE OF FORMATION

                                       OF

                          VINTAGE PARK AT STANLEY, LLC

     This Certificate of Formation of Vintage Park at Stanley, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                          VINTAGE PARK AT STANLEY, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.156

                                                                   Exhibit 3.156

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                          VINTAGE PARK AT STANLEY, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Vintage Park at Stanley, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of November 1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Vintage Park at Stanley, LLC (the
"LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.


                                        1



                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in


                                        2



the LLC shall be securities governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and each other applicable jurisdiction.
The Unit Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Vintage Park at
     Stanley, LLC and shall be a security governed by Article 8 of the Uniform
     Commercial Code as in effect in the State of Delaware and, to the extent
     permitted by applicable law, Article 8 of the Uniform Commercial Code of
     each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;

          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.


                                        3



     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution


                                        4



          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                  ADDRESS
- -------------                  -------
                            
Vintage Park at Stanley, LLC   14430 Metcalf
                               Stanley, Kansas 66216



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.157

                                                                   Exhibit 3.157

                            CERTIFICATE OF FORMATION

                                       OF

               WATHENA HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Wathena Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

               WATHENA HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

          NATIONAL REGISTERED AGENTS, INC.
          9 EAST LOOCKERMAN STREET, SUITE 1B
          DOVER, KENT COUNTY, DELAWARE, 19901

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of November 1, 2004.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.158

                                                                   Exhibit 3.158

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                WATHENA HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

     This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Wathena Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of November
1, 2004 (the "Effective Date").

     The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

     Section 1.01 Name. The name of the LLC is Wathena Healthcare and
Rehabilitation Center, LLC (the "LLC").

     Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

     Section 1.03 Registered Office. The address of the registered office of the
LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

     Section 1.04 Registered Agent. The name and address of the registered agent
of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

     Section 1.05 Term. The LLC shall have a perpetual existence.

     Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Cindy VanDran, as an authorized person, with the Secretary of State of the State
of Delaware on November 1, 2004, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

     Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is
to engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and


                                        1



          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

     Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

     Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department


                                       2



     Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Wathena Healthcare and
     Rehabilitation Center, LLC and shall be a security governed by Article 8 of
     the Uniform Commercial Code as in effect in the State of Delaware and, to
     the extent permitted by applicable law, Article 8 of the Uniform Commercial
     Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

     Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

     Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

     Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

     Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

          (a) be comprised minimally of a President, Chief Financial Officer,
Vice President, and Secretary;

          (b) be selected by the Member;

          (c) be allowed to serve on the Board of Managers;


                                       3



          (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

          (e) meet at such times as may be necessary for the business of the
LLC.

     Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

     Jose Lynch      President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer

     Roland Rapp     Secretary

     Section 5.03 President. The President shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
President, have general charge of the business, affairs and property of the LLC
and general supervision over the other Officers and any of the LLC's employees
and agents and see that all orders and resolutions of the LLC are carried into
effect, and discharge such duties as may be assigned to him or her by the Board
of Managers or the Member.

     Section 5.04 Senior Vice President of Operations. The Senior Vice President
of Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

     Section 5.05 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Financial Officer and shall have such powers and
discharge such duties as may be assigned to him or her, from time to time, by
the other Officers, Board of Managers or the Member.

     Section 5.06 Secretary. The Secretary shall, under the direction of the
Member and Board of Managers, perform all duties incident to the office of
Secretary and shall have such powers and discharge such duties as may be
assigned to him or her, from time to time, by the other Officers, the Member or
the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

          The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or


                                       4



incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

     Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

     Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

     Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

     Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY



PROPERTY NAME                           ADDRESS
- -------------                           -------
                                     
Wathena Healthcare and Rehabilitation   212 Highway 36
Center, LLC                             Wathena, Kansas 66090



                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.159

                                                                   Exhibit 3.159

                            CERTIFICATE OF FORMATION

                                       OF

                        WEST SIDE CAMPUS OF CARE GP, LLC

     This Certificate of Formation of West Side Campus of Care GP, LLC, dated as
of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is West Side
Campus of Care GP, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.160

                                                                   Exhibit 3.160
                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                        WEST SIDE CAMPUS OF CARE GP, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of West
Side Campus of Care GP, LLC (the "LLC"), is made and entered into effective as
of July 20, 2004 (the "Effective Date"), by Summit Care Corporation, a
California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is West Side
Campus of Care GP, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 19365 FM 2252, Suite 5, Garden Ridge, Texas 78266
or such other location as may hereafter be determined by the Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman  Street,
Suite 1B, Dover, Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in West Side Campus
          of Care GP, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of   the Member
and the Board of Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same  instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8


          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                         MEMBER:

                                         Summit Care Corporation,
                                         a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
West Side Campus of Care GP, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.161

                                                                   Exhibit 3.161

                            CERTIFICATE OF FORMATION

                                       OF

                       WILLOW CREEK HEALTHCARE CENTER, LLC

     This Certificate of Formation of Willow Creek Healthcare Center, LLC, dated
as of July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Willow
Creek Healthcare Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.162

                                                                   Exhibit 3.162

                           SECOND AMENDED AND RESTATED
                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                       WILLOW CREEK HEALTHCARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

          This Second Amended and Restated Limited Liability Company Operating
Agreement (together with the exhibits attached hereto, this "Agreement") of
Willow Creek Healthcare Center, LLC (the "LLC"), is made and entered into
effective as of July 19, 2004 (the "Effective Date"), by Summit Care
Corporation, a California corporation, as the sole equity member (the "Member").

          The Member, by execution of this Agreement, hereby continues the LLC
as a limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

          Section 1.01 Name. The name of the LLC continued hereby is Willow
Creek Healthcare Center, LLC (the "LLC").

          Section 1.02 Principal Business Office. The principal business office
of the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

          Section 1.03 Registered Office. The address of the registered office
of the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901.

          Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

          Section 1.05 Term. The LLC shall have a perpetual existence.

          Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the initial Limited Liability Company
Agreement of the LLC, effective as of July 3, 2003, and the filing of a
Certificate of Formation by Sally G. Burns, as an authorized person, with the
Secretary of State of the State of Delaware on July 3, 2003, as the same may be
amended, restated or supplemented from time to time. Upon the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware,
her powers as an "authorized person" ceased, and the Member thereupon became the
designated "authorized person" and shall continue as the designated "authorized
person" within the meaning of the Act. The Member or an Officer (as defined
herein) shall execute, deliver and file any other certificates (and any
amendments, supplements and/or restatements thereof) necessary for the LLC to



qualify to do business in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                                   ARTICLE II.
                                     PURPOSE

          The business purpose of the LLC is to engage in any lawful act or
activity and exercise any powers permitted to limited liability companies
organized under the laws of the State of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

          Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act,
and to the extent specifically set forth in this Agreement, certain activities
of the LLC shall be managed through a Board of Managers (the "Board of
Managers"). The Board of Managers shall have the following characteristics:

               (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

               (b) the continuing Managers shall be as set forth on Exhibit A
attached hereto and incorporated herein by this reference;

               (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

               (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Notice of any meeting need not be given to any Manager who submits a
signed waiver of notice or who attends such meeting without protesting the lack
of notice to him. Meetings of the Board of Managers may be in person or by
conference telephone or other similar communications system. Actions of the
Board of Managers may be by written consent (in which case, no notice shall be
required), which written consents, except as otherwise expressly required in
this Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers at a meeting, in person
or by proxy, shall constitute a quorum. Each Manager has the right to one vote.
Each Manager not only has the right to his own vote, but may vote by proxy for
one other Manager;

               (e) the Member may remove any Manager for any reason or no reason
by executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2



               (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

               (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                  ARTICLE IV.
                                     MEMBER

          Section 4.01 Unit Certificates. The limited liability company
interests of the LLC shall consist of 100 units (the "Membership Interests"),
which shall be evidenced by a unit certificate (the "Unit Certificate"). The
Member hereby irrevocably elects that all Membership Interests in the LLC shall
be securities governed by Article 8 of the Uniform Commercial Code as in effect
in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legends:

          "This certificate evidences a membership interest in Willow Creek
          Healthcare Center, LLC and shall be a security governed by Article 8
          of the Uniform Commercial Code as in effect in the State of Delaware
          and, to the extent permitted by applicable law, Article 8 of the
          Uniform Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

          Section 4.02 Powers. The Member shall have the right and authority to
take all actions (i) specifically enumerated in this Agreement or (ii) which
such Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.


                                       3



          Section 4.03 Liability. The debts, obligations and liabilities of the
LLC, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the LLC, and the Member shall not be obligated
for any such debt, obligation or liability of the LLC solely by reason of its
status as the Member of the LLC.

          Section 4.04 Allocations and Distributions. The LLC's profits and
losses shall be allocated to the Member. At the time determined by a majority of
the Managers, the Managers may cause the LLC to distribute to the Member any
cash held by it which is not in violation of Sections 18-607 or 18-804 of the
Act or any contractual agreement binding on the LLC.

                                   ARTICLE V.
                                    OFFICERS

          Section 5.01 Officers. The day-to-day operation of the business of the
LLC shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

               (a) be comprised of such offices as shall be designated by the
Member and may include one or more of the following offices: Chief Executive
Officer, President, Chief Financial Officer, Vice President, and Secretary;

               (b) be selected by the Member;

               (c) be allowed to serve on the Board of Managers;

               (d) serve so long as the Member desires or until their
resignation, death or incapacitation; and

               (e) meet at such times as may be necessary for the business of
the LLC.

          Section 5.02 Continuing Officers. The Member may elect one person to
more than one position. The Officers shall continue in office following the
execution of this Agreement by the Member:

          Jose Lynch      President and Chief Executive Officer

          John Harrison   Chief Financial Officer

          Roland Rapp     Vice President and Secretary

          The Member or the Board of Managers may also appoint such additional
officers, including a Treasurer, Assistant Treasurers, Assistant Secretaries and
Vice Presidents, as it may deem advisable.


                                       4



          Section 5.03 Chief Executive Officer. The Chief Executive Officer
shall, under the direction of the Member and Board of Managers, perform all
duties incident to the office of Chief Executive Officer, have general charge of
the business, affairs and property of the LLC and general supervision over the
other Officers and any of the LLC's employees and agents and see that all orders
and resolutions of the LLC are carried into effect.

          Section 5.04 President. The President shall, under the direction of
the Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

          Section 5.05 Chief Financial Officer. The Chief Financial Officer
shall, under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the Chief Executive Officer, Board of Managers or
the Member.

          Section 5.06 Vice President. The Vice President shall, under the
direction of the Member, Board of Managers, and Chief Executive Officer, perform
all duties incident to the office of Vice President and discharge such duties as
may be assigned to him or her by the Chief Executive Officer, Board of Managers
or the Member.

          Section 5.07 Secretary. The Secretary shall, under the direction of
the Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the Chief
Executive Officer, the Member or the Board of Managers. The Secretary shall:

               (a) record all the actions taken by the Member and the Board of
Managers in a book to be kept for that purpose;

               (b) if required, cause notices to be duly given in accordance
with the provisions of the Agreement and as required by statute;

               (c) be custodian of the records; and

               (d) see that all of the books, reports, statements, certificates
and all other documents and records required to be kept by statute or this
Agreement are properly filed and kept.


                                       5



                                   ARTICLE VI.
                                 INDEMNIFICATION

          Section 6.01 Indemnification.

               (a) Subject to the standard of conduct set forth in Section
6.01(e), any individual, corporation, partnership, joint venture, limited
liability partnership, limited liability company, association, joint stock
company, trust, unincorporated organization, whether or not a legal entity, or
other business or governmental entity ("Person") who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a Manager or agent of the LLC, shall be
indemnified and held harmless by the LLC to the fullest extent legally
permissible against all expenses, liabilities and losses (including attorney's
fees and disbursements), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding.

               (b) To the extent that a Manager or agent of the LLC has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraph (a) of this Section 6.01, or in defense of
any claim, issue or matter therein, he shall be indemnified by the LLC against
expenses (including attorneys' fees and disbursements) actually and reasonably
incurred by him in connection therewith without the necessity of any action
being taken by the LLC other than the determination, in good faith, that such
defense has been successful. In all other cases wherein indemnification is
provided by this Section 6.01, unless ordered by a court, indemnification shall
be made by the LLC only as authorized in the specific case upon a determination
that indemnification of the Manager or agent has met the applicable standards
specified in this Section 6.01. Such determination shall be made (1) by the
Board of Managers by a majority vote of a quorum consisting of Managers who were
not parties to such action, suit or proceeding (each, a "Disinterested
Manager"), or (2) if such a quorum is not obtainable, or even if obtainable (if
a majority of a quorum of Disinterested Managers so directs), by independent
legal counsel in a written opinion.

               (c) The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, in itself, create a presumption that the Person
seeking indemnification did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the LLC,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (d) Expenses (including attorneys' fees and disbursements)
incurred by a Manager or an agent of the LLC in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
LLC in advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Managers in the specific case upon receipt of an
undertaking by or on behalf of such Manager or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
LLC.

               (e) To the fullest extent permitted by law, no Manager of the LLC
shall be personally liable to the LLC for monetary damages for any breach of
fiduciary duty by such


                                       6



Person as a Manager. Notwithstanding the foregoing sentence, a Manager shall be
liable (i) for breach of the Manager's duty of loyalty to the LLC or the Member,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law or (iii) for any transaction from which
the Manager derived an improper personal benefit. No amendment to or repeal of
this Section 6.01(e) shall apply to or have any effect on the liability or
alleged liability of any Manager of the LLC for or with respect to any acts or
omissions of such Manager occurring prior to such amendment.

               (f) The indemnification and advancement of expenses provided by
this Section 6.01 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement may be entitled under any
agreement, vote of the Board of Managers or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, and shall continue as to a Person who has ceased to be a Manager,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such Person.

                                  ARTICLE VII.
                                  MISCELLANEOUS

          Section 7.01 Assignments; Additions; Transfers; Dissolution.

               (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

               (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

               (c) Admission of Additional Members. One or more additional
members of the LLC may be admitted to the LLC with the written consent of the
Member.

               (d) Dissolution. The LLC shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the LLC or the occurrence
of any other event which terminates the continued membership of the last
remaining member of the LLC in the LLC unless the LLC is


                                       7



continued without dissolution in a manner permitted by this Agreement or the Act
(ii) an agreement of all Members to dissolve the LLC or (iii) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.

          Section 7.02 Amendments. Subject to the provisions set forth herein,
this Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

          Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

          Section 7.04 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

          Section 7.05 Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

          Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]


                                       8



          IN WITNESS WHEREOF, the Member has executed this Agreement effective
as of the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

Second Amended and Restated Limited Liability Company Operating Agreement of
Willow Creek Healthcare Center, LLC


                                       S-1



                                    EXHIBIT A
                               CONTINUING MANAGERS

Jose Lynch

John Harrison

Roland Rapp

EX-3.163

                                                                   Exhibit 3.163

                            CERTIFICATE OF FORMATION

                                       OF

                            WOODLAND CARE CENTER, LLC

     This Certificate of Formation of Woodland Care Center, LLC, dated as of
July 3, 2003, is being duly executed and filed by Sally G. Burns, as an
authorized person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is Woodland
Care Center, LLC.

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act are
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Kent County, Delaware 19901.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first above written.


                                        /s/ Sally G. Burns
                                        ----------------------------------------
                                        Sally G. Burns
                                        Authorized Person

EX-3.164

                                                                   EXHIBIT 3.164

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            WOODLAND CARE CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

      This Limited Liability Company Operating Agreement (together with the
exhibits attached hereto, this "Agreement") of Woodland Care Center, LLC (the
"LLC"), is entered into by Summit Care Corporation, as the sole equity member
(the "Member"), effective as of July 3, 2003 (the "Effective Date").

      The Member, by execution of this Agreement, hereby forms the LLC as a
limited liability company pursuant to, and in accordance with, the Delaware
Limited Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"),
and, in connection therewith, hereby agrees as follows:

                                   ARTICLE I.
                        ORGANIZATIONAL AND OTHER MATTERS

      Section 1.01 Name. The name of the LLC is Woodland Care Center, LLC (the
"LLC").

      Section 1.02 Principal Business Office. The principal business office of
the LLC shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 or such other location as may hereafter be determined by the
Member.

      Section 1.03 Registered Office. The address of the registered office of
the LLC in the State of Delaware is c/o National Registered Agents, Inc., 9 East
Loockerman Street, Suite 1B, Dover, Delaware 19901.

      Section 1.04 Registered Agent. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of Delaware is
National Registered Agents, Inc., 9 East Loockerman Street, Suite 1B, Dover,
Delaware 19901.

      Section 1.05 Term. The LLC shall have a perpetual existence.

      Section 1.06 Certificate of Formation. The LLC was formed as a limited
liability company under the Act by the filing of a Certificate of Formation by
Sally G. Burns, as an authorized person, with the Secretary of State of the
State of Delaware on July 3, 2003, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.



                                   ARTICLE II.
                                     PURPOSE

      Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC
is to engage in the following activities:

            (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

            (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                                  ARTICLE III.
                                BOARD OF MANAGERS

      Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and
to the extent specifically set forth in this Agreement, certain activities of
the LLC shall be managed through a Board of Managers (the "Board of Managers").
The Board of Managers shall have the following characteristics:

            (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

            (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;

            (c) all actions of the Board of Managers shall require a majority
vote of the quorum of the Managers; provided, however, that the Board of
Managers may delegate the day-to-day management of the LLC to an individual(s)
or entity which may or may not be a Manager;

            (d) the Board of Managers shall meet at such times as may be
necessary for the business of the LLC upon at least five business days' prior
written notice of the time, place and purpose of the meeting given by any two
Managers. Meetings of the Board of Managers may be in person or by conference
telephone or other similar communications system, and actions of the Board of
Managers may be by written consent (in which case, no notice shall be required),
which written consents, except as otherwise expressly required in this
Agreement, shall be effective if signed in one or more counterparts by a
majority of the Managers. The presence of two Managers, in person or by proxy,
shall constitute a quorum. Each Manager has the right to one vote. Each Manager
not only has the right to his own vote, but may vote by proxy for one other
Manager;

            (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;


                                       2


            (f) in the event there exists a vacancy on the Board of Managers,
the Member shall, as soon as reasonably practicable, execute a certificate
setting forth a replacement Manager; and

            (g) the debts, obligations and liabilities of the LLC, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                                   ARTICLE IV.
                                     MEMBER

      Section 4.01 Member. Simultaneously with the execution and delivery of
this Agreement, the following Person is admitted as the sole equity member of
the LLC (the "Member") and shall hold all Membership Interests (as defined in
Section 4.02 below) effective as of the date of this Agreement. The name and
address of the Member is as follows:

      Name and Address

      Summit Care Corporation
      27442 Portola Parkway, Suite 200
      Foothill Ranch, California  92610
      Attn:  Legal Department

      Section 4.02 Unit Certificates. The limited liability company interests of
the LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

      "This certificate evidences a membership interest in Woodland Care Center,
      LLC and shall be a security governed by Article 8 of the Uniform
      Commercial Code as in effect in the State of Delaware and, to the extent
      permitted by applicable law, Article 8 of the Uniform Commercial Code of
      each other applicable jurisdiction."

      "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
      NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
      RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
      Liability Company maintains books for the purpose of registering
      transfers. This Certificate has not been and will not be registered under
      the Securities Act of 1933 or under the securities or blue sky laws of any
      state. The holder of this Certificate, by its acceptance hereof,
      represents that it is acquiring this security for investment and not with
      a view to any sale or distribution hereof."

      This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.


                                       3


      Section 4.03 Powers. The Member shall have the right and authority to take
all actions (i) specifically enumerated in this Agreement or (ii) which such
Member otherwise deems necessary, useful or appropriate for the day-to-day
management and conduct of the LLC's business and which are not otherwise
specifically reserved to the Managers.

      Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

      Section 4.05 Allocations and Distributions. The LLC's profits and losses
shall be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                                   ARTICLE V.
                                    OFFICERS

      Section 5.01 Officers. The day-to-day operation of the business of the LLC
shall be managed by officers (the "Officers") to the extent specifically set
forth in this Agreement and under the direction of the Member and the Board of
Managers. The Officers shall:

            (a) be comprised minimally of a President, Chief Executive Officer,
Chief Financial Officer, Vice President, and Secretary;

            (b) be selected by the Member;

            (c) be allowed to serve on the Board of Managers;

            (d) serve so long as the Member desires or until their resignation,
death or incapacitation; and

            (e) meet at such times as may be necessary for the business of the
LLC.

      Section 5.02 Initial Officers. The initial Officers shall take office upon
the execution of this Agreement by the Member and shall be:

      Boyd Hendrickson       Chief Executive Officer

      Jose Lynch             President




                                       4


      Kelly Atkins           Senior Vice President of Operations

      John Harrison          Chief Financial Officer

      Roland Rapp            Secretary

      Section 5.03 Chief Executive Officer. The Chief Executive Officer shall,
under the direction of the Member and Board of Managers, perform all duties
incident to the office of Chief Executive Officer, have general charge of the
business, affairs and property of the LLC and general supervision over the other
Officers and any of the LLC's employees and agents and see that all orders and
resolutions of the LLC are carried into effect.

      Section 5.04 President. The President shall, under the direction of the
Member, Board of Managers, and Chief Executive Officer, perform all duties
incident to the office of President and discharge such duties as may be assigned
to him or her by the Chief Executive Officer, Board of Managers or the Member.
During the absence or disability of the Chief Executive Officer, the President
shall exercise all the functions of the Chief Executive Officer and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer.

      Section 5.05 Senior Vice President of Operations. The Senior Vice
President of Operations shall, under the direction of the Member, Board of
Managers and Chief Executive Officer, perform all duties incident to the office
of Senior Vice President of Operations and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, Board of Managers or the Member.

      Section 5.06 Chief Financial Officer. The Chief Financial Officer shall,
under the direction of the Member, Board of Managers and Chief Executive
Officer, perform all duties incident to the office of Chief Financial Officer
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

      Section 5.07 Secretary. The Secretary shall, under the direction of the
Member, Board of Managers and Chief Executive Officer, perform all duties
incident to the office of Secretary and shall have such powers and discharge
such duties as may be assigned to him or her, from time to time, by the other
Officers, the Member or the Board of Managers. The Secretary shall:

            (a) record all the actions taken by the LLC's Member, Officers and
the Board of Managers in a book to be kept for that purpose;

            (b) if required, cause notices to be duly given in accordance with
the provisions of the Agreement and as required by statute;

            (c) be custodian of the records; and


                                       5


            (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                                   ARTICLE VI.
                                 INDEMNIFICATION

      The LLC shall indemnify and hold harmless (i) the Member, (ii) any
affiliate of the Member, and (iii) any officer, director, employee, or agent of
the LLC, the Member or any of its affiliates, (each, an "Indemnitee"), from and
against any claim, loss, damage, liability, or reasonable expense (including
reasonable attorneys' fees, court costs, and costs of investigation and appeal)
suffered or incurred by any such Indemnitee by reason of, or arising from, the
operations, business, or affairs of, or any action taken or failure to act on
behalf of, the LLC.

                                  ARTICLE VII.
                                  MISCELLANEOUS

      Section 7.01 Assignments; Additions; Transfers; Dissolution.

            (a) Assignments. The Member may, with prior written notice to the
LLC and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

            (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

            (c) Admission of Additional Members. One or more additional members
of the LLC may be admitted to the LLC with the written consent of the Member.

            (d) Dissolution. The LLC shall be dissolved, and its affairs shall
be wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.


                                       6


      Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

      Section 7.03 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to principles of conflicts of laws).

      Section 7.04 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

      Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

      Section 7.06 Facsimile Signatures. This Agreement maybe executed by
facsimile transmission and such facsimile will be valid and binding to the same
extent as if it were an original.

                            [Signature Page Follows]



                                       7


      IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                    MEMBER:

                                    SUMMIT CARE CORPORATION,
                                    a California corporation


                                    By:   /s/ Roland Rapp
                                          ------------------------------------
                                          Roland Rapp, Secretary

                                       S-1



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY


PROPERTY NAME                            ADDRESS
Woodland Care Center                     7120 Corbin Avenue
                                         Reseda, California  91335

                                       A-1



                                    EXHIBIT B

                                INITIAL MANAGERS

Jose Lynch

John Harrison

Roland Rapp


                                       B-1




July 3, 2003

Woodland Care Center, LLC
27442 Portola Parkway, Suite 200
Foothill Ranch, California  92610

RE:   Management Agreement - Woodland Care Center, LLC

Ladies and Gentlemen:

      For good and valuable consideration, each of the undersigned persons, who
have been designated as initial Managers of Woodland Care Center, LLC, a
Delaware limited liability company (the "Company"), in accordance with the
Limited Liability Company Operating Agreement of the Company, as it may be
amended or restated from time to time (the "LLC Agreement"), hereby agree:

      1. To accept such person's rights and authority as a Manager (as defined
in the LLC Agreement) under the LLC Agreement and to perform and discharge such
person's duties and obligations as a Manager under the LLC Agreement and agrees
that such rights, authority, duties and obligations under the LLC Agreement
shall continue until such person's successor as a Manager is designated or until
such person's resignation or removal as a Manager in accordance with the LLC
Agreement. A Manager is designated as a "manager" of the Company within the
meaning of the Delaware Limited Liability Company Act.

      2. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.

      IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.

                                    /s/ Jose Lynch
                                    --------------------------------------------
                                    Jose Lynch

                                    /s/ John Harrison
                                    --------------------------------------------
                                    John Harrison

                                    /s/ Roland Rapp
                                    --------------------------------------------
                                    Roland Rapp

EX-3.165

                                                                   Exhibit 3.165

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                BRIARCLIFF NURSING AND REHABILITATION CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Briarcliff Nursing and
Rehabilitation Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

              Briarcliff Nursing and Rehabilitation Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Briarcliff Nursing and Rehabilitation
                                        Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.166

                                                                   Exhibit 3.166

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                BRIARCLIFF NURSING AND REHABILITATION CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION .................................................     3
   1.1    Formation .....................................................     3
   1.2    Name ..........................................................     3
   1.3    Principal Place of Business ...................................     3
   1.4    Business Purpose ..............................................     3
   1.5    Certificate of Limited Partnership ............................     3
   1.6    Fictitious Business Name Statements ...........................     4
   1.7    Registered Office; Agent for Service of Process ...............     4
   1.8    Term ..........................................................     4
   1.9    Partnership Interests and Certificates ........................     4

ARTICLE 2. DEFINITIONS ..................................................     5
   2.1    "Adjusted Capital Account Deficit" ............................     5
   2.2    "Agreement" ...................................................     5
   2.3    "Capital Account" .............................................     5
   2.4    "Capital Contributions" .......................................     6
   2.5    "Cash Available for Distribution" .............................     6
   2.6    "Code" ........................................................     6
   2.7    "Depreciation" ................................................     6
   2.8    "Financing Proceeds" ..........................................     7
   2.9    "General Partner" .............................................     7
   2.10   "Gross Asset Value" ...........................................     7
   2.11   "Interest" ....................................................     8
   2.12   "Limited Partner" .............................................     8
   2.13   "Net Profits" or "Net Losses" .................................     8
   2.14   "Nonrecourse Deductions" ......................................     9
   2.15   "Nonrecourse Liability" .......................................     9
   2.16   "Partner Minimum Gain" ........................................     9
   2.17   "Partner Nonrecourse Debt" ....................................     9
   2.18   "Partner Nonrecourse Deductions" ..............................     9
   2.19   "Partners" ....................................................     9
   2.20   "Partnership" .................................................     9
   2.21   "Partnership Minimum Gain" ....................................     9
   2.22   "Partnership Property" ........................................     9
   2.23   "Percentage Interest" .........................................     9
   2.24   "Person" ......................................................     9
   2.25   "Recourse Liability" ..........................................     9
   2.26   "Regulations" .................................................     9
   2.27   "Reserves" ....................................................     9
   2.28   "Terminating Capital Transaction" .............................    10
   2.29   "Transfer" ....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS .......................    10
   3.1    Initial Capital Contributions of the Partners .................    10
   3.2    Additional Capital Contributions by the Partners ..............    10
   3.3    Capital Accounts ..............................................    10
   3.4    Other Matters .................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS ................................    11
   4.1    Distributions In General ......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions .............    11
   4.3    Allocation of Net Profits and Losses ..........................    11
   4.4    Additional Special Allocations ................................    11

ARTICLE 5. OPERATIONS ...................................................    14
   5.1    Management ....................................................    14
   5.2    Reimbursement .................................................    15
   5.3    Reports .......................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner ....................................................    15

ARTICLE 6. TRANSFERS ....................................................    16
   6.1    Transfers and Assignments .....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP ..    16
   7.1    Limitations ...................................................    16
   7.2    Exclusive Causes ..............................................    17
   7.3    Liquidation ...................................................    17
   7.4    No Capital Contribution Upon Dissolution ......................    17
   7.5    Notice of Dissolution .........................................    17

ARTICLE 8. MISCELLANEOUS ................................................    18
   8.1    Accounting and Fiscal Year ....................................    18
   8.2    Entire Agreement ..............................................    18
   8.3    Further Assurances ............................................    18
   8.4    Notices .......................................................    18
   8.5    Attorneys' Fees ...............................................    18
   8.6    Governing Law .................................................    18
   8.7    Amendments ....................................................    18
   8.8    Counterparts ..................................................    19
   8.9    Facsimile Signatures ..........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                BRIARCLIFF NURSING AND REHABILITATION CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Briarcliff Nursing and Rehabilitation Center
GP, LLC, a Delaware limited liability company, as general partner (the "General
Partner"), and Summit Care Corporation, a California corporation (the "Limited
Partner"), for the purpose of continuing a limited partnership under the
Delaware Revised Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Briarcliff Nursing and
Rehabilitation Center, LP." The Partnership may also do business at the same
time under one or more fictitious names if the General Partner determines that
such is in the best interests of the Partnership. The General Partner may from
time to time for reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Briarcliff Nursing
and Rehabilitation Center, LP and shall be a security governed by Article 8 of
the Uniform Commercial Code as in effect in the State of Delaware and, to the
extent permitted by applicable law, Article 8 of the Uniform Commercial Code of
each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Briarcliff Nursing and Rehabilitation Center
GP, LLC, a Delaware limited liability company, and its permitted successors and
assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Briarcliff Nursing and Rehabilitation
                                        Center GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS


NAME AND ADDRESS OF PARTNERS                           PERCENTAGE INTEREST
- ----------------------------                           -------------------
                                                    
Summit Care Corporation                                        99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Briarcliff Nursing and Rehabilitation Center GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.167

                                                                   Exhibit 3.167

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             CLAIRMONT BEAUMONT, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Clairmont Beaumont, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                           Clairmont Beaumont GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Clairmont Beaumont GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.168

                                                                   Exhibit 3.168

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             CLAIRMONT BEAUMONT, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                             CLAIRMONT BEAUMONT, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Clairmont Beaumont GP, LLC, a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Clairmont Beaumont, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Clairmont Beaumont,
LP and shall be a security governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and, to the extent permitted by applicable
law, Article 8 of the Uniform Commercial Code of each other applicable
jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Clairmont Beaumont GP, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Clairmont Beaumont GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS          PERCENTAGE INTEREST
- ----------------------------          -------------------
                                   
Summit Care Corporation                       99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

Clairmont Beaumont GP, LLC                     1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.169

                                                                   Exhibit 3.169

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             CLAIRMONT LONGVIEW, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Clairmont Longview, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                           Clairmont Longview GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Clairmont Longview GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.170

                                                                   Exhibit 3.170

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             CLAIRMONT LONGVIEW, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================


                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                             CLAIRMONT LONGVIEW, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Clairmont Longview GP, LLC, a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Clairmont Longview, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Clairmont Longview,
LP and shall be a security governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and, to the extent permitted by applicable
law, Article 8 of the Uniform Commercial Code of each other applicable
jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                    ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Clairmont Longview GP, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Clairmont Longview GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

Clairmont Longview GP, LLC                  1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610



                                    EXHIBIT A

EX-3.171

                                                                   Exhibit 3.171

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                     COLONIAL NEW BRAUNFELS CARE CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Colonial New Braunfels Care
Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Colonial New Braunfels GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Colonial New Braunfels GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.172

                                                                   Exhibit 3.172

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                     COLONIAL NEW BRAUNFELS CARE CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                     COLONIAL NEW BRAUNFELS CARE CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Colonial New Braunfels GP, LLC, a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Colonial New Braunfels Care
Center, LP." The Partnership may also do business at the same time under one or
more fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Colonial New
Braunfels Care Center, LP and shall be a security governed by Article 8 of the
Uniform Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Colonial New Braunfels GP, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12




          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Colonial New Braunfels GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Colonial New Braunfels GP, LLC              1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.173

                                                                   Exhibit 3.173

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                         COLONIAL TYLER CARE CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Colonial Tyler Care Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                             Colonial Tyler GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Colonial Tyler GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.174

                                                                   Exhibit 3.174

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                         COLONIAL TYLER CARE CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of
           General Partner...............................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                         COLONIAL TYLER CARE CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Colonial Tyler GP, LLC, a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Colonial Tyler Care Center, LP."
The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Colonial Tyler Care
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Colonial Tyler GP, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Colonial Tyler GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary

                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation

                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- --------------------------------   -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Colonial Tyler GP, LLC                      1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.175

                                                                   Exhibit 3.175

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                           COMANCHE NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Comanche Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Comanche Nursing Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Comanche Nursing Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.176

                                                                   Exhibit 3.176

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                           COMANCHE NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                               TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION .................................................     3
   1.1    Formation .....................................................     3
   1.2    Name ..........................................................     3
   1.3    Principal Place of Business ...................................     3
   1.4    Business Purpose ..............................................     3
   1.5    Certificate of Limited Partnership ............................     3
   1.6    Fictitious Business Name Statements ...........................     4
   1.7    Registered Office; Agent for Service of Process ...............     4
   1.8    Term ..........................................................     4
   1.9    Partnership Interests and Certificates ........................     4

ARTICLE 2. DEFINITIONS ..................................................     5
   2.1    "Adjusted Capital Account Deficit" ............................     5
   2.2    "Agreement" ...................................................     5
   2.3    "Capital Account" .............................................     5
   2.4    "Capital Contributions" .......................................     6
   2.5    "Cash Available for Distribution" .............................     6
   2.6    "Code" ........................................................     6
   2.7    "Depreciation" ................................................     6
   2.8    "Financing Proceeds" ..........................................     7
   2.9    "General Partner" .............................................     7
   2.10   "Gross Asset Value" ...........................................     7
   2.11   "Interest" ....................................................     8
   2.12   "Limited Partner" .............................................     8
   2.13   "Net Profits" or "Net Losses" .................................     8
   2.14   "Nonrecourse Deductions" ......................................     9
   2.15   "Nonrecourse Liability" .......................................     9
   2.16   "Partner Minimum Gain" ........................................     9
   2.17   "Partner Nonrecourse Debt" ....................................     9
   2.18   "Partner Nonrecourse Deductions" ..............................     9
   2.19   "Partners" ....................................................     9
   2.20   "Partnership" .................................................     9
   2.21   "Partnership Minimum Gain" ....................................     9
   2.22   "Partnership Property" ........................................     9
   2.23   "Percentage Interest" .........................................     9
   2.24   "Person" ......................................................     9
   2.25   "Recourse Liability" ..........................................     9
   2.26   "Regulations" .................................................     9
   2.27   "Reserves" ....................................................     9
   2.28   "Terminating Capital Transaction" .............................    10
   2.29   "Transfer" ....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS .......................    10
   3.1    Initial Capital Contributions of the Partners .................    10
   3.2    Additional Capital Contributions by the Partners ..............    10
   3.3    Capital Accounts ..............................................    10
   3.4    Other Matters .................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS ................................    11
   4.1    Distributions In General ......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions .............    11
   4.3    Allocation of Net Profits and Losses ..........................    11
   4.4    Additional Special Allocations ................................    11

ARTICLE 5. OPERATIONS ...................................................    14
   5.1    Management ....................................................    14
   5.2    Reimbursement .................................................    15
   5.3    Reports .......................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner ....................................................    15

ARTICLE 6. TRANSFERS ....................................................    16
   6.1    Transfers and Assignments .....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP ..    16
   7.1    Limitations ...................................................    16
   7.2    Exclusive Causes ..............................................    17
   7.3    Liquidation ...................................................    17
   7.4    No Capital Contribution Upon Dissolution ......................    17
   7.5    Notice of Dissolution .........................................    17

ARTICLE 8. MISCELLANEOUS ................................................    18
   8.1    Accounting and Fiscal Year ....................................    18
   8.2    Entire Agreement ..............................................    18
   8.3    Further Assurances ............................................    18
   8.4    Notices .......................................................    18
   8.5    Attorneys' Fees ...............................................    18
   8.6    Governing Law .................................................    18
   8.7    Amendments ....................................................    18
   8.8    Counterparts ..................................................    19
   8.9    Facsimile Signatures ..........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                           COMANCHE NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Comanche Nursing Center GP, LLC, a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Comanche Nursing Center, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Comanche Nursing
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Comanche Nursing Center GP, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Comanche Nursing Center GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Comanche Nursing Center GP, LLC             1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.177

                                                                   Exhibit 3.177

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                           CORONADO NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Coronado Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Coronado Nursing Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Coronado Nursing Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.178

                                                                   Exhibit 3.178

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                           CORONADO NURSING CENTER, LP

                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1    Formation......................................................     3
   1.2    Name...........................................................     3
   1.3    Principal Place of Business....................................     3
   1.4    Business Purpose...............................................     3
   1.5    Certificate of Limited Partnership.............................     3
   1.6    Fictitious Business Name Statements............................     4
   1.7    Registered Office; Agent for Service of Process................     4
   1.8    Term...........................................................     4
   1.9    Partnership Interests and Certificates.........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1    "Adjusted Capital Account Deficit".............................     5
   2.2    "Agreement"....................................................     5
   2.3    "Capital Account"..............................................     5
   2.4    "Capital Contributions"........................................     6
   2.5    "Cash Available for Distribution"..............................     6
   2.6    "Code".........................................................     6
   2.7    "Depreciation".................................................     6
   2.8    "Financing Proceeds"...........................................     7
   2.9    "General Partner"..............................................     7
   2.10   "Gross Asset Value"............................................     7
   2.11   "Interest".....................................................     8
   2.12   "Limited Partner"..............................................     8
   2.13   "Net Profits" or "Net Losses"..................................     8
   2.14   "Nonrecourse Deductions".......................................     9
   2.15   "Nonrecourse Liability"........................................     9
   2.16   "Partner Minimum Gain".........................................     9
   2.17   "Partner Nonrecourse Debt".....................................     9
   2.18   "Partner Nonrecourse Deductions"...............................     9
   2.19   "Partners".....................................................     9
   2.20   "Partnership"..................................................     9
   2.21   "Partnership Minimum Gain".....................................     9
   2.22   "Partnership Property".........................................     9
   2.23   "Percentage Interest"..........................................     9
   2.24   "Person".......................................................     9
   2.25   "Recourse Liability"...........................................     9
   2.26   "Regulations"..................................................     9
   2.27   "Reserves".....................................................     9
   2.28   "Terminating Capital Transaction"..............................    10
   2.29   "Transfer".....................................................    10



                                       i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1    Initial Capital Contributions of the Partners..................    10
   3.2    Additional Capital Contributions by the Partners...............    10
   3.3    Capital Accounts...............................................    10
   3.4    Other Matters..................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1    Distributions In General.......................................    11
   4.2    Distributions of Cash Available for Distribution and
             Net Proceeds From Terminating Capital Transactions..........    11
   4.3    Allocation of Net Profits and Losses...........................    11
   4.4    Additional Special Allocations.................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1    Management.....................................................    14
   5.2    Reimbursement..................................................    15
   5.3    Reports........................................................    15
   5.4    Indemnification of General Partner; Liability of
             General Partner.............................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1    Transfers and Assignments......................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1    Limitations....................................................    16
   7.2    Exclusive Causes...............................................    17
   7.3    Liquidation....................................................    17
   7.4    No Capital Contribution Upon Dissolution.......................    17
   7.5    Notice of Dissolution..........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1    Accounting and Fiscal Year.....................................    18
   8.2    Entire Agreement...............................................    18
   8.3    Further Assurances.............................................    18
   8.4    Notices........................................................    18
   8.5    Attorneys' Fees................................................    18
   8.6    Governing Law..................................................    18
   8.7    Amendments.....................................................    18
   8.8    Counterparts...................................................    19
   8.9    Facsimile Signatures...........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                           CORONADO NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Coronado Nursing Center GP, LLC, a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Coronado Nursing Center, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Coronado Nursing
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Coronado Nursing Center GP, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to
repay such amount if it shall be determined that such Indemnitee is not entitled
to be indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Coronado Nursing Center GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1




                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- --------------------------------   -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Coronado Nursing Center GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.179

                                                                   Exhibit 3.179

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             FLATONIA OAK MANOR, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Flatonia Oak Manor, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                           Flatonia Oak Manor GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Flatonia Oak Manor GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.180

                                                                   Exhibit 3.180

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             FLATONIA OAK MANOR, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1    Formation......................................................     3
   1.2    Name...........................................................     3
   1.3    Principal Place of Business....................................     3
   1.4    Business Purpose...............................................     3
   1.5    Certificate of Limited Partnership.............................     3
   1.6    Fictitious Business Name Statements............................     4
   1.7    Registered Office; Agent for Service of Process................     4
   1.8    Term...........................................................     4
   1.9    Partnership Interests and Certificates.........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1    "Adjusted Capital Account Deficit".............................     5
   2.2    "Agreement"....................................................     5
   2.3    "Capital Account"..............................................     5
   2.4    "Capital Contributions"........................................     6
   2.5    "Cash Available for Distribution"..............................     6
   2.6    "Code".........................................................     6
   2.7    "Depreciation".................................................     6
   2.8    "Financing Proceeds"...........................................     7
   2.9    "General Partner"..............................................     7
   2.10   "Gross Asset Value"............................................     7
   2.11   "Interest".....................................................     8
   2.12   "Limited Partner"..............................................     8
   2.13   "Net Profits" or "Net Losses"..................................     8
   2.14   "Nonrecourse Deductions".......................................     9
   2.15   "Nonrecourse Liability"........................................     9
   2.16   "Partner Minimum Gain".........................................     9
   2.17   "Partner Nonrecourse Debt".....................................     9
   2.18   "Partner Nonrecourse Deductions"...............................     9
   2.19   "Partners".....................................................     9
   2.20   "Partnership"..................................................     9
   2.21   "Partnership Minimum Gain".....................................     9
   2.22   "Partnership Property".........................................     9
   2.23   "Percentage Interest"..........................................     9
   2.24   "Person".......................................................     9
   2.25   "Recourse Liability"...........................................     9
   2.26   "Regulations"..................................................     9
   2.27   "Reserves".....................................................     9
   2.28   "Terminating Capital Transaction"..............................    10
   2.29   "Transfer".....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1    Initial Capital Contributions of the Partners..................    10
   3.2    Additional Capital Contributions by the Partners...............    10
   3.3    Capital Accounts...............................................    10
   3.4    Other Matters..................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1    Distributions In General.......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions..............    11
   4.3    Allocation of Net Profits and Losses...........................    11
   4.4    Additional Special Allocations.................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1    Management.....................................................    14
   5.2    Reimbursement..................................................    15
   5.3    Reports........................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner.....................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1    Transfers and Assignments......................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1    Limitations....................................................    16
   7.2    Exclusive Causes...............................................    17
   7.3    Liquidation....................................................    17
   7.4    No Capital Contribution Upon Dissolution.......................    17
   7.5    Notice of Dissolution..........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1    Accounting and Fiscal Year.....................................    18
   8.2    Entire Agreement...............................................    18
   8.3    Further Assurances.............................................    18
   8.4    Notices........................................................    18
   8.5    Attorneys' Fees................................................    18
   8.6    Governing Law..................................................    18
   8.7    Amendments.....................................................    18
   8.8    Counterparts...................................................    19
   8.9    Facsimile Signatures...........................................    19




                                       ii


                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                             FLATONIA OAK MANOR, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Flatonia Oak Manor GP, LLC, a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Flatonia Oak Manor, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Flatonia Oak Manor,
LP and shall be a security governed by Article 8 of the Uniform Commercial Code
as in effect in the State of Delaware and, to the extent permitted by applicable
law, Article 8 of the Uniform Commercial Code of each other applicable
jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Flatonia Oak Manor GP, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                    ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Flatonia Oak Manor GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Flatonia Oak Manor GP, LLC                  1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.181

                                                                   Exhibit 3.181

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                       GUADALUPE VALLEY NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Guadalupe Valley Nursing Center,
LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                     Guadalupe Valley Nursing Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Guadalupe Valley Nursing Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.182

                                                                   Exhibit 3.182

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                       GUADALUPE VALLEY NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                       GUADALUPE VALLEY NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Guadalupe Valley Nursing Center GP, LLC, a
Delaware limited liability company, as general partner (the "General Partner"),
and Summit Care Corporation, a California corporation (the "Limited Partner"),
for the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Guadalupe Valley Nursing Center,
LP." The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Guadalupe Valley
Nursing Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Guadalupe Valley Nursing Center GP, LLC, a
Delaware limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Guadalupe Valley Nursing Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS              PERCENTAGE INTEREST
- ----------------------------              -------------------
                                       
Summit Care Corporation                           99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Guadalupe Valley Nursing Center GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.183

                                                                   Exhibit 3.183

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

               HALLETTSVILLE REHABILITATION AND NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Hallettsville Rehabilitation and
Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                      Hallettsville Rehabilitation GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Hallettsville Rehabilitation GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.184

                                                                   Exhibit 3.184

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

               HALLETTSVILLE REHABILITATION AND NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
               HALLETTSVILLE REHABILITATION AND NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Hallettsville Rehabilitation GP, LLC, a
Delaware limited liability company, as general partner (the "General Partner"),
and Summit Care Corporation, a California corporation (the "Limited Partner"),
for the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Hallettsville Rehabilitation and
Nursing Center, LP." The Partnership may also do business at the same time under
one or more fictitious names if the General Partner determines that such is in
the best interests of the Partnership. The General Partner may from time to time
for reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Hallettsville
Rehabilitation and Nursing Center, LP and shall be a security governed by
Article 8 of the Uniform Commercial Code as in effect in the State of Delaware
and, to the extent permitted by applicable law, Article 8 of the Uniform
Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)       The amount, if any, that such Partner is obligated to
                    contribute to the Partnership upon liquidation of such
                    Partner's Interest; and

          (b)       The amount that such Partner is obligated to restore or is
                    deemed to be obligated to restore pursuant to the
                    penultimate sentence of each of Regulations Sections
                    1.704-2(g)(1) and 1.704-2(i)(5); and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Hallettsville Rehabilitation GP, LLC, a
Delaware limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)       the acquisition of an additional interest in the Partnership
                    by a new or existing Partner in exchange for more than a de
                    minimis Capital Contribution, if the General Partner
                    reasonably determines that such adjustment is necessary or
                    appropriate to reflect the relative economic interests of
                    the Partners in the Partnership;

          (b)       the distribution by the Partnership to a Partner of more
                    than a de minimis amount of Partnership property as
                    consideration for an interest in the Partnership, if the
                    General Partner reasonably determines that such adjustment
                    is necessary or appropriate to reflect the relative economic
                    interests of the Partners in the Partnership;

          (c)       the liquidation of the Partnership within the meaning of
                    Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)       at such other times as the General Partner shall reasonably
                    determine necessary or advisable in order to comply with
                    Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any
               and all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure
               the services of such Persons, including any of the parties hereto
               or any Persons, firms or corporations related thereto or
               affiliated therewith, as the General Partner may reasonably deem
               advisable for the proper execution of its duties as General
               Partner hereunder, provided such services are within the scope of
               the foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and
               all instruments, documents or statements necessary or convenient
               to effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in
               such amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General
               Partner; provided, however, the events set forth at Sections
               17-402(a)(4) and (5) of the Act shall not constitute events of
               withdrawal of the General Partner and upon the occurrence of any
               such event the General Partner shall not cease to be general
               partner of the Partnership and the Partnership shall continue
               without dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss
               or deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other
               assets of the Partnership shall first be applied to satisfaction
               of all Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Hallettsville Rehabilitation GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS           PERCENTAGE INTEREST
- ----------------------------           -------------------
                                    
Summit Care Corporation                        99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Hallettsville Rehabilitation GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.185

                                                                   Exhibit 3.185

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                           HALLMARK REHABILITATION, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Hallmark Rehabilitation, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Hallmark Rehabilitation GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Hallmark Rehabilitation GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.187

                                                                   Exhibit 3.187

                                STATE OF DELAWARE
                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             HOSPICE OF THE WEST, LP

     The Undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter 17,
do hereby certify a follows:

     1. The name of the limited partnership is: HOSPICE OF THE WEST, LP

     2. The address of its registered office and the name and the address of the
registered agent of the limited partnership is:

               NATIONAL REGISTERED AGENTS, INC.
               9 EAST LOOCKERMAN STREET, SUITE 1B
               DOVER, KENT COUNTY, DELAWARE, 19901

     3. The name and mailing address of the sole general partner is:

               Hospice Care of the West, LLC
               27442 Portola Parkway, Suite 200
               Foothill Ranch, CA 92610

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership of to be
duly executed as of the 5th day of May, 2004.

                                        Hospice Care of the West, LLC
                                        General Partner


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

EX-3.188

                                                                   Exhibit 3.188

================================================================================

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             HOSPICE OF THE WEST, LP
                         A DELAWARE LIMITED PARTNERSHIP

                             DATED AS OF MAY 5, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION .................................................     3
   1.1    Formation .....................................................     3
   1.2    Name ..........................................................     3
   1.3    Principal Place of Business ...................................     3
   1.4    Business Purpose ..............................................     3
   1.5    Certificate of Limited Partnership ............................     3
   1.6    Fictitious Business Name Statements ...........................     4
   1.7    Registered Office; Agent for Service of Process ...............     4
   1.8    Term ..........................................................     4
   1.9    Partnership Interests and Certificates ........................     4

ARTICLE 2. DEFINITIONS ..................................................     4
   2.1    "Adjusted Capital Account Deficit" ............................     4
   2.2    "Agreement" ...................................................     5
   2.3    "Capital Account" .............................................     5
   2.4    "Capital Contributions" .......................................     6
   2.5    "Cash Available for Distribution" .............................     6
   2.6    "Code" ........................................................     6
   2.7    "Depreciation" ................................................     6
   2.8    "Financing Proceeds" ..........................................     6
   2.9    "General Partner" .............................................     6
   2.10   "Gross Asset Value" ...........................................     6
   2.11   "Interest" ....................................................     8
   2.12   "Net Profits" or "Net Losses" .................................     8
   2.13   "Nonrecourse Deductions" ......................................     8
   2.14   "Nonrecourse Liability" .......................................     8
   2.15   "Partner Minimum Gain" ........................................     8
   2.16   "Partner Nonrecourse Debt" ....................................     8
   2.17   "Partner Nonrecourse Deductions" ..............................     9
   2.18   "Partners" ....................................................     9
   2.19   "Partnership" .................................................     9
   2.20   "Partnership Minimum Gain" ....................................     9
   2.21   "Partnership Property" ........................................     9
   2.22   "Percentage Interest" .........................................     9
   2.23   "Person" ......................................................     9
   2.24   "Recourse Liability" ..........................................     9
   2.25   "Regulations" .................................................     9
   2.26   "Reserves" ....................................................     9
   2.27   "Terminating Capital Transaction" .............................     9
   2.28   "Transfer" ....................................................     9

ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS .......................    10
   3.1    Initial Capital Contributions of the Partners .................    10



                                        i



                                                                         
   3.2    Additional Capital Contributions by the Partners ..............    10
   3.3    Capital Accounts ..............................................    10
   3.4    Other Matters .................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS ................................    10
   4.1    Distributions In General ......................................    10
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions .............    11
   4.3    Allocation of Net Profits and Losses ..........................    11
   4.4    Additional Special Allocations ................................    11

ARTICLE 5. OPERATIONS ...................................................    13
   5.1    Management ....................................................    13
   5.2    Reimbursement .................................................    14
   5.3    Reports .......................................................    14
   5.4    Indemnification of General Partner; Liability of General
             Partner ....................................................    15

ARTICLE 6. TRANSFERS ....................................................    16
   6.1    Transfers and Assignments .....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP ..    16
   7.1    Limitations ...................................................    16
   7.2    Exclusive Causes ..............................................    16
   7.3    Liquidation ...................................................    16
   7.4    No Capital Contribution Upon Dissolution ......................    17
   7.5    Notice of Dissolution .........................................    17

ARTICLE 8. MISCELLANEOUS ................................................    17
   8.1    Accounting and Fiscal Year ....................................    17
   8.2    Entire Agreement ..............................................    17
   8.3    Further Assurances ............................................    17
   8.4    Notices .......................................................    17
   8.5    Attorneys' Fees ...............................................    18
   8.6    Governing Law .................................................    18
   8.7    Amendments ....................................................    18
   8.8    Counterparts ..................................................    18
   8.9    Facsimile Signatures ..........................................    18




                                       ii


                        LIMITED PARTNERSHIP AGREEMENT OF
                             HOSPICE OF THE WEST, LP

          THIS LIMITED PARTNERSHIP AGREEMENT (this "Agreement") is made and
entered into effective as of May 5, 2004 (the "Effective Date"), by and between
Hospice Care of the West, LLC, a Delaware limited liability company, as general
partner (the "General Partner"), and Hospice Care Investments, LLC, a Delaware
limited liability company (the "Limited Partner"), for the purpose of forming a
limited partnership under the Delaware Revised Uniform Limited Partnership Act
(the "Act").

                             ARTICLE 1. ORGANIZATION

     1.1 FORMATION The General Partner and the Limited Partner hereby form the
Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME The name of the Partnership shall be "Hospice of the West, LP."
The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS The principal office of the Partnership is
located at 27442 Portola Parkway, Suite 200, Foothill Ranch, CA 92610, or such
other place as the General Partner may from time to time designate by notice to
the Limited Partner. The Partnership may maintain offices at such other place or
places within or outside the State of Delaware as the General Partner deems
advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP The Partnership was formed as a
limited partnership under the Act by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on May
5, 2004. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.


                                        3



     1.6 FICTITIOUS BUSINESS NAME STATEMENTS Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM The term of the Partnership shall commence on the date that the
Certificate is filed with the Office of the Delaware Secretary of State, and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Hospice of the
West, LP and shall be a security governed by Article 8 of the Uniform Commercial
Code as in effect in the State of Delaware and, to the extent permitted by
applicable law, Article 8 of the Uniform Commercial Code of each other
applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.

                             ARTICLE 2. DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:


                                        4



          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.

          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with


                                        5



such Regulations. In the event that the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any additions
or subtractions thereto, are computed in order to comply with such Regulations,
the General Partner may make such modification, provided that it is not likely
to have a material effect on the amounts distributable to any Partner pursuant
to Article 7 hereof upon the dissolution of the Partnership. The General Partner
shall also make (a) any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (b) any appropriate modifications in the event that unanticipated events
might otherwise cause this Agreement not to comply with Regulations Sections
1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.

     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Hospice Care of the West, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:


                                        6



          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this Section 2.10.4 to the
extent that the General Partner reasonably determines that an adjustment
pursuant to subsection (b) of Section 2.10.2 above is necessary or appropriate
in connection with a transaction that would otherwise result in an adjustment
pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.


                                        7



     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.12.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.12.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.12.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.12.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.12.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.

     2.13 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.14 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.15 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.16 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).


                                        8



     2.17 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.18 "PARTNERS" means the General Partner and the Limited Partner.

     2.19 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.20 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.21 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.22 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.23 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.24 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.25 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.26 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed sufficient by the General Partner for working
capital, to pay taxes, insurance, debt service, and other costs or expenses
incident to the ownership of the Partnership Property and the conduct of
business by the Partnership as contemplated hereunder.

     2.27 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.28 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.


                                        9



                ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS The Partners have made or
been credited with the Capital Contributions to the Partnership reflected in the
Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the Partnership as a return of
capital on account of such Capital Contributions without, in each instance, the
approval of both Partners. Under circumstances requiring or permitting a return
of its Capital Contributions, the Partners shall have the right to receive
property other than cash as reasonably determined by the General Partner, except
as may be specifically prohibited herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                    ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.


                                       10



     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL Transactions Subject to Article 7 hereof, any Cash Available
for Distribution shall be distributed to the Partners in proportion to their
Percentage Interests.

          4.2.1 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.2 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS Notwithstanding the foregoing provisions
of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted pursuant to Section 2.10.2, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations promulgated thereunder.
Allocations pursuant to this Section 4.4.1 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of Net Profits, Net Losses
and any other items or distributions pursuant to any provision of this
Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.


                                       11



          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).

          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a


                                       12



Partner in complete liquidation of his Interest in the Partnership, the amount
of such adjustment to the Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Partners in accordance with their interests in the Partnership in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom
such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence of the Partnership the General Partner's interest
in each item of Partnership income, gain, loss, deduction or credit shall equal
at least one percent (1%) of each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                              ARTICLE 5. OPERATIONS

     5.1 MANAGEMENT The business and affairs of the Partnership shall be managed
exclusively by the General Partner. The General Partner shall have full and
complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner


                                       13



               may reasonably deem advisable for the proper execution of its
               duties as General Partner hereunder, provided such services are
               within the scope of the foregoing authority granted to the
               General Partner hereunder, such employment to be for such
               reasonable compensation and upon such reasonable terms and
               conditions as the General Partner shall determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and

          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT Subject to Article 8 hereof, the General Partner shall be
entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.1 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.


                                       14



     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Partnership of a written commitment by or
on behalf of the Indemnitee to repay such amount if it shall be determined that
such Indemnitee is not entitled to be indemnified as authorized in this Section
5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed


                                       15



to, the interests of the Partnership, and (ii) the conduct of the General
Partner or such other Person did not constitute gross negligence or willful
misconduct.

                              ARTICLE 6. TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

     ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS The Partnership may be dissolved, liquidated and terminated
pursuant to and only pursuant to the provisions of this Article 7, and the
parties hereto do hereby irrevocably waive any and all other rights they may
have to cause a dissolution of the Partnership or a sale or partition of any or
all of the Partnership's assets.

     7.2 EXCLUSIVE CAUSES The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or


                                       16



               transfer in kind shall be deemed recognized and allocated to the
               Partners in the manner set forth in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION Each Partner shall look solely
to the assets of the Partnership for all distributions with respect to the
Partnership, its Capital Contribution thereto, its Capital Account, its share of
Net Profits or Net Losses or other items and shall have no recourse therefor
(upon dissolution or otherwise) against any Partner. No Partner shall be
obligated to restore to the Partnership any negative balance that may exist or
continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).

                            ARTICLE 8. MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES Any notice, consent, payment, demand, or communication required
or permitted to be given by any provision of this Agreement shall be in writing
and shall be delivered personally to the Person or to an officer of the Person
to whom the same is directed, or sent by registered or certified mail, return
receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally,


                                       17



or if sent by registered or certified mail, postage and charges prepaid and
properly addressed, on the date of receipt or refusal indicated on the return
receipt.

     8.5 ATTORNEYS' FEES In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.

     8.8 COUNTERPARTS This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       18



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

                                        "GENERAL PARTNER"

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


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        HOSPICE CARE INVESTMENTS, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Hospice Care Investments, LLC              99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Hospice Care of the West, LLC               1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.189

                                                                   Exhibit 3.189

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                HOSPITALITY NURSING AND REHABILITATION CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Hospitality Nursing and
Rehabilitation Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                           Hospitality Nursing GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Hospitality Nursing GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.190

                                                                   Exhibit 3.190

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                HOSPITALITY NURSING AND REHABILITATION CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1    Formation......................................................     3
   1.2    Name...........................................................     3
   1.3    Principal Place of Business....................................     3
   1.4    Business Purpose...............................................     3
   1.5    Certificate of Limited Partnership.............................     3
   1.6    Fictitious Business Name Statements............................     4
   1.7    Registered Office; Agent for Service of Process................     4
   1.8    Term...........................................................     4
   1.9    Partnership Interests and Certificates.........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1    "Adjusted Capital Account Deficit".............................     5
   2.2    "Agreement"....................................................     5
   2.3    "Capital Account"..............................................     5
   2.4    "Capital Contributions"........................................     6
   2.5    "Cash Available for Distribution"..............................     6
   2.6    "Code".........................................................     6
   2.7    "Depreciation".................................................     6
   2.8    "Financing Proceeds"...........................................     7
   2.9    "General Partner"..............................................     7
   2.10   "Gross Asset Value"............................................     7
   2.11   "Interest".....................................................     8
   2.12   "Limited Partner"..............................................     8
   2.13   "Net Profits" or "Net Losses"..................................     8
   2.14   "Nonrecourse Deductions".......................................     9
   2.15   "Nonrecourse Liability"........................................     9
   2.16   "Partner Minimum Gain".........................................     9
   2.17   "Partner Nonrecourse Debt".....................................     9
   2.18   "Partner Nonrecourse Deductions"...............................     9
   2.19   "Partners".....................................................     9
   2.20   "Partnership"..................................................     9
   2.21   "Partnership Minimum Gain".....................................     9
   2.22   "Partnership Property".........................................     9
   2.23   "Percentage Interest"..........................................     9
   2.24   "Person".......................................................     9
   2.25   "Recourse Liability"...........................................     9
   2.26   "Regulations"..................................................     9
   2.27   "Reserves".....................................................     9
   2.28   "Terminating Capital Transaction"..............................    10
   2.29   "Transfer".....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1    Initial Capital Contributions of the Partners..................    10
   3.2    Additional Capital Contributions by the Partners...............    10
   3.3    Capital Accounts...............................................    10
   3.4    Other Matters..................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1    Distributions In General.......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions..............    11
   4.3    Allocation of Net Profits and Losses...........................    11
   4.4    Additional Special Allocations.................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1    Management.....................................................    14
   5.2    Reimbursement..................................................    15
   5.3    Reports........................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner.....................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1    Transfers and Assignments......................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1    Limitations....................................................    16
   7.2    Exclusive Causes...............................................    17
   7.3    Liquidation....................................................    17
   7.4    No Capital Contribution Upon Dissolution.......................    17
   7.5    Notice of Dissolution..........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1    Accounting and Fiscal Year.....................................    18
   8.2    Entire Agreement...............................................    18
   8.3    Further Assurances.............................................    18
   8.4    Notices........................................................    18
   8.5    Attorneys' Fees................................................    18
   8.6    Governing Law..................................................    18
   8.7    Amendments.....................................................    18
   8.8    Counterparts...................................................    19
   8.9    Facsimile Signatures...........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                HOSPITALITY NURSING AND REHABILITATION CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Hospitality Nursing GP, LLC a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Hospitality Nursing and
Rehabilitation Center, LP." The Partnership may also do business at the same
time under one or more fictitious names if the General Partner determines that
such is in the best interests of the Partnership. The General Partner may from
time to time for reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Hospitality Nursing
and Rehabilitation Center, LP and shall be a security governed by Article 8 of
the Uniform Commercial Code as in effect in the State of Delaware and, to the
extent permitted by applicable law, Article 8 of the Uniform Commercial Code of
each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Hospitality Nursing GP, LLC a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Hospitality Nursing GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                   EXHIBIT A

                       PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Hospitality Nursing GP, LLC                 1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.191

                                                                   Exhibit 3.191

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                           LIVE OAK NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Live Oak Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Live Oak Nursing Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Live Oak Nursing Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.192

                                                                   Exhibit 3.192

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                           LIVE OAK NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
    8.1 Accounting and Fiscal Year.......................................    18
    8.2 Entire Agreement.................................................    18
    8.3 Further Assurances...............................................    18
    8.4 Notices..........................................................    18
    8.5 Attorneys' Fees..................................................    18
    8.6 Governing Law....................................................    18
    8.7 Amendments.......................................................    18
    8.8 Counterparts.....................................................    19
    8.9 Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                           LIVE OAK NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Live Oak Nursing Center GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Live Oak Nursing Center, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Live Oak Nursing
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Live Oak Nursing Center GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Live Oak Nursing Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

Live Oak Nursing Center GP, LLC             1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610


                                    EXHIBIT A

EX-3.193

                                                                   Exhibit 3.193

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                 MONUMENT REHABILITATION AND NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Monument Rehabilitation and
Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Monument Rehabilitation GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Monument Rehabilitation GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.194

                                                                   Exhibit 3.194

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                 MONUMENT REHABILITATION AND NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                 MONUMENT REHABILITATION AND NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Monument Rehabilitation GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Monument Rehabilitation and
Nursing Center, LP." The Partnership may also do business at the same time under
one or more fictitious names if the General Partner determines that such is in
the best interests of the Partnership. The General Partner may from time to time
for reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Monument
Rehabilitation and Nursing Center, LP and shall be a security governed by
Article 8 of the Uniform Commercial Code as in effect in the State of Delaware
and, to the extent permitted by applicable law, Article 8 of the Uniform
Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Monument Rehabilitation GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18


     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Monument Rehabilitation GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

Monument Rehabilitation GP, LLC             1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610


                                    EXHIBIT A

EX-3.195

                                                                   Exhibit 3.195

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                          OAK CREST NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Oak Crest Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                        Oak Crest Nursing Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Oak Crest Nursing Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.196

                                                                   Exhibit 3.196

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                          OAK CREST NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                          OAK CREST NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Oak Crest Nursing Center GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Oak Crest Nursing Center, LP."
The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Oak Crest Nursing
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Oak Crest Nursing Center GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Oak Crest Nursing Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Oak Crest Nursing Center GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.197

                                                                   Exhibit 3.197

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                        OAKLAND MANOR NURSING CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Oakland Manor Nursing Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                              Oakland Manor GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Oakland Manor GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.198

                                                                   Exhibit 3.198

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                        OAKLAND MANOR NURSING CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1    Formation......................................................     3
   1.2    Name...........................................................     3
   1.3    Principal Place of Business....................................     3
   1.4    Business Purpose...............................................     3
   1.5    Certificate of Limited Partnership.............................     3
   1.6    Fictitious Business Name Statements............................     4
   1.7    Registered Office; Agent for Service of Process................     4
   1.8    Term...........................................................     4
   1.9    Partnership Interests and Certificates.........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1    "Adjusted Capital Account Deficit".............................     5
   2.2    "Agreement"....................................................     5
   2.3    "Capital Account"..............................................     5
   2.4    "Capital Contributions"........................................     6
   2.5    "Cash Available for Distribution"..............................     6
   2.6    "Code".........................................................     6
   2.7    "Depreciation".................................................     6
   2.8    "Financing Proceeds"...........................................     7
   2.9    "General Partner"..............................................     7
   2.10   "Gross Asset Value"............................................     7
   2.11   "Interest".....................................................     8
   2.12   "Limited Partner"..............................................     8
   2.13   "Net Profits" or "Net Losses"..................................     8
   2.14   "Nonrecourse Deductions".......................................     9
   2.15   "Nonrecourse Liability"........................................     9
   2.16   "Partner Minimum Gain".........................................     9
   2.17   "Partner Nonrecourse Debt".....................................     9
   2.18   "Partner Nonrecourse Deductions"...............................     9
   2.19   "Partners".....................................................     9
   2.20   "Partnership"..................................................     9
   2.21   "Partnership Minimum Gain".....................................     9
   2.22   "Partnership Property".........................................     9
   2.23   "Percentage Interest"..........................................     9
   2.24   "Person".......................................................     9
   2.25   "Recourse Liability"...........................................     9
   2.26   "Regulations"..................................................     9
   2.27   "Reserves".....................................................     9
   2.28   "Terminating Capital Transaction"..............................    10
   2.29   "Transfer".....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1    Initial Capital Contributions of the Partners..................    10
   3.2    Additional Capital Contributions by the Partners...............    10
   3.3    Capital Accounts...............................................    10
   3.4    Other Matters..................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1    Distributions In General.......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions..............    11
   4.3    Allocation of Net Profits and Losses...........................    11
   4.4    Additional Special Allocations.................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1    Management.....................................................    14
   5.2    Reimbursement..................................................    15
   5.3    Reports........................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner.....................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1    Transfers and Assignments......................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1    Limitations....................................................    16
   7.2    Exclusive Causes...............................................    17
   7.3    Liquidation....................................................    17
   7.4    No Capital Contribution Upon Dissolution.......................    17
   7.5    Notice of Dissolution..........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1    Accounting and Fiscal Year.....................................    18
   8.2    Entire Agreement...............................................    18
   8.3    Further Assurances.............................................    18
   8.4    Notices........................................................    18
   8.5    Attorneys' Fees................................................    18
   8.6    Governing Law..................................................    18
   8.7    Amendments.....................................................    18
   8.8    Counterparts...................................................    19
   8.9    Facsimile Signatures...........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                        OAKLAND MANOR NURSING CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Oakland Manor GP, LLC a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Oakland Manor Nursing Center,
LP." The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Oakland Manor
Nursing Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Oakland Manor GP, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Oakland Manor GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



  NAME AND ADDRESS OF PARTNERS     PERCENTAGE INTEREST
  ----------------------------     -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Oakland Manor GP, LLC                       1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.199

                                                                   Exhibit 3.199

                              AMENDED AND RESTATED
                       CERTIFICATE OF LIMITED PARTNERSHIP
                                       OF
                            SHG SECURED RESOURCES, LP

     SHG Secured Resources, LP, a limited partnership organized and existing
under the Delaware Revised Uniform Limited Partnership Act (the "Act"), for the
purpose of amending and restating its Certificate of Limited Partnership filed
with the office of the Secretary of State of the State of Delaware on July 3,
2003 under the name SHG Secured Resources, LP, hereby certifies that effective
on July 19, 2004 its Certificate of Limited Partnership is amended and restated
in its entirety to read as follows:

     1. The name of the limited partnership is SHG Resources, LP.

     2. The name and address, including street, number, city and county of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                       Secured Resource Management GP, LLC
                        27442 Portola Parkway, Suite 200
                        Foothill Ranch, California 92610

     4. The future effective date and time of this Amended and Restated
Certificate of Limited Partnership shall be July 19, 2004 at 11:59 p.m. Eastern
Time.

                            [Signature Page Follows]



     IN WITNESS WHEREOF, this Amended and Restated Certificate of Limited
Partnership, which restates and integrates and also further amends the
Certificate of Limited Partnership as heretofore amended or supplemented, has
been duly executed as of the 19th day of July, 2004, and is being filed in
accordance with Section 17-210 of the Act by a general partner thereunto duly
authorized.

                                        SECURED RESOURCE MANAGEMENT GP, LLC,
                                        its General Partner


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp
                                            Secretary

EX-3.200

                                                                   Exhibit 3.200

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                                SHG RESOURCES, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 19, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                                SHG RESOURCES, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 19, 2004 (the
"Effective Date"), by and between Leasehold Resource Group, LLC, a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "SHG Resources, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in SHG Resources, LP
and shall be a security governed by Article 8 of the Uniform Commercial Code as
in effect in the State of Delaware and, to the extent permitted by applicable
law, Article 8 of the Uniform Commercial Code of each other applicable
jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Leasehold Resource Group, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

               (a)  pay, collect, compromise, arbitrate or otherwise adjust any
                    and all claims or demands of or against the Partnership, in
                    such amounts and upon such terms and conditions as the
                    General Partner shall reasonably determine;

               (b)  from time to time, employ, engage, hire or otherwise secure
                    the services of such Persons, including any of the parties
                    hereto or any Persons, firms or corporations related thereto
                    or affiliated therewith, as the General Partner may
                    reasonably deem advisable for the proper execution of its
                    duties as General Partner hereunder, provided such services
                    are within the scope of the foregoing authority granted to
                    the General Partner hereunder, such employment to be for
                    such reasonable compensation and upon such reasonable terms
                    and conditions as the General Partner shall determine;

               (c)  prepare, execute, file, record, publish and deliver any and
                    all instruments, documents or statements necessary or
                    convenient to effectuate any and all actions that the
                    General Partner is authorized to take on behalf of the
                    Partnership.

               (d)  borrow money and issue evidences of indebtedness necessary,
                    convenient or incidental to the accomplishment of the
                    purposes of the Partnership, and secure the same by
                    mortgage, pledge or other lien on any Partnership assets;

               (e)  deal with, or otherwise engage in business with, or provide
                    services to and receive compensation therefor from, any
                    Person who has provided or may in the future provide
                    services to, lend money to, sell property to or purchase
                    property from the Partners or any affiliate of the Partners;

               (f)  establish and maintain Reserves for such purposes and in
                    such amounts as it deems appropriate from time to time; and


                                       14



               (g)  engage in any kind of activity and perform and carry out
                    contracts of any kind necessary to, in connection with or
                    incidental to the accomplishment of the purposes of the
                    Partnership, as may be lawfully carried on or performed by a
                    limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

               (a)  The unanimous election of the Partners;

               (b)  The occurrence of an event of withdrawal of the General
                    Partner; provided, however, the events set forth at Sections
                    17-402(a)(4) and (5) of the Act shall not constitute events
                    of withdrawal of the General Partner and upon the occurrence
                    of any such event the General Partner shall not cease to be
                    general partner of the Partnership and the Partnership shall
                    continue without dissolution; and

               (c)  Dissolution of the Partnership by law, including pursuant to
                    a decree of judicial dissolution under Section 17-802 of the
                    Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

               (a)  The Partnership Property shall be liquidated in an orderly,
                    businesslike and commercially reasonable manner.

               (b)  Any Net Profit, Net Loss or other item of income, gain, loss
                    or deduction realized by the Partnership upon the sale of
                    the Partnership Property or transfer in kind shall be deemed
                    recognized and allocated to the Partners in the manner set
                    forth in Article 4 hereof.

               (c)  The proceeds of sale of Partnership assets and all other
                    assets of the Partnership shall first be applied to
                    satisfaction of all Partnership debts in accordance with the
                    Act and to the establishment of any necessary Reserves, and
                    then shall be distributed to the Partners in proportion to
                    and to the extent of positive balances in their respective
                    Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Leasehold Resource Group, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Leasehold Resource Group, LLC               1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.201

                                                                   Exhibit 3.201

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                            SOUTHWOOD CARE CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Southwood Care Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                          Southwood Care Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Southwood Care Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.202

                                                                   Exhibit 3.202

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                            SOUTHWOOD CARE CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION .................................................     3
   1.1    Formation .....................................................     3
   1.2    Name ..........................................................     3
   1.3    Principal Place of Business ...................................     3
   1.4    Business Purpose ..............................................     3
   1.5    Certificate of Limited Partnership ............................     3
   1.6    Fictitious Business Name Statements ...........................     4
   1.7    Registered Office; Agent for Service of Process ...............     4
   1.8    Term ..........................................................     4
   1.9    Partnership Interests and Certificates ........................     4

ARTICLE 2. DEFINITIONS ..................................................     5
   2.1    "Adjusted Capital Account Deficit" ............................     5
   2.2    "Agreement" ...................................................     5
   2.3    "Capital Account" .............................................     5
   2.4    "Capital Contributions" .......................................     6
   2.5    "Cash Available for Distribution" .............................     6
   2.6    "Code" ........................................................     6
   2.7    "Depreciation" ................................................     6
   2.8    "Financing Proceeds" ..........................................     7
   2.9    "General Partner" .............................................     7
   2.10   "Gross Asset Value" ...........................................     7
   2.11   "Interest" ....................................................     8
   2.12   "Limited Partner" .............................................     8
   2.13   "Net Profits" or "Net Losses" .................................     8
   2.14   "Nonrecourse Deductions" ......................................     9
   2.15   "Nonrecourse Liability" .......................................     9
   2.16   "Partner Minimum Gain" ........................................     9
   2.17   "Partner Nonrecourse Debt" ....................................     9
   2.18   "Partner Nonrecourse Deductions" ..............................     9
   2.19   "Partners" ....................................................     9
   2.20   "Partnership" .................................................     9
   2.21   "Partnership Minimum Gain" ....................................     9
   2.22   "Partnership Property" ........................................     9
   2.23   "Percentage Interest" .........................................     9
   2.24   "Person" ......................................................     9
   2.25   "Recourse Liability" ..........................................     9
   2.26   "Regulations" .................................................     9
   2.27   "Reserves" ....................................................     9
   2.28   "Terminating Capital Transaction" .............................    10
   2.29   "Transfer" ....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS .......................    10
   3.1    Initial Capital Contributions of the Partners .................    10
   3.2    Additional Capital Contributions by the Partners ..............    10
   3.3    Capital Accounts ..............................................    10
   3.4    Other Matters .................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS ................................    11
   4.1    Distributions In General ......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions .............    11
   4.3    Allocation of Net Profits and Losses ..........................    11
   4.4    Additional Special Allocations ................................    11

ARTICLE 5. OPERATIONS ...................................................    14
   5.1    Management ....................................................    14
   5.2    Reimbursement .................................................    15
   5.3    Reports .......................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner ....................................................    15

ARTICLE 6. TRANSFERS ....................................................    16
   6.1    Transfers and Assignments .....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP ..    16
   7.1    Limitations ...................................................    16
   7.2    Exclusive Causes ..............................................    17
   7.3    Liquidation ...................................................    17
   7.4    No Capital Contribution Upon Dissolution ......................    17
   7.5    Notice of Dissolution .........................................    17

ARTICLE 8. MISCELLANEOUS ................................................    18
   8.1    Accounting and Fiscal Year ....................................    18
   8.2    Entire Agreement ..............................................    18
   8.3    Further Assurances ............................................    18
   8.4    Notices .......................................................    18
   8.5    Attorneys' Fees ...............................................    18
   8.6    Governing Law .................................................    18
   8.7    Amendments ....................................................    18
   8.8    Counterparts ..................................................    19
   8.9    Facsimile Signatures ..........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                           SOUTHWOOD CARE CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Southwood Care Center GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Southwood Care Center, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Southwood Care
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Southwood Care Center GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Southwood Care Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- --------------------------------   -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

Southwood Care Center GP, LLC              1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610



                                    EXHIBIT A

EX-3.203

                                                                   Exhibit 3.203

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                         TEXAS CITYVIEW CARE CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Texas Cityview Care Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                       Texas Cityview Care Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Texas Cityview Care Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.204

                                                                   Exhibit 3.204

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                         TEXAS CITYVIEW CARE CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION .................................................     3
   1.1    Formation .....................................................     3
   1.2    Name ..........................................................     3
   1.3    Principal Place of Business ...................................     3
   1.4    Business Purpose ..............................................     3
   1.5    Certificate of Limited Partnership ............................     3
   1.6    Fictitious Business Name Statements ...........................     4
   1.7    Registered Office; Agent for Service of Process ...............     4
   1.8    Term ..........................................................     4
   1.9    Partnership Interests and Certificates ........................     4

ARTICLE 2. DEFINITIONS ..................................................     5
   2.1    "Adjusted Capital Account Deficit" ............................     5
   2.2    "Agreement" ...................................................     5
   2.3    "Capital Account" .............................................     5
   2.4    "Capital Contributions" .......................................     6
   2.5    "Cash Available for Distribution" .............................     6
   2.6    "Code" ........................................................     6
   2.7    "Depreciation" ................................................     6
   2.8    "Financing Proceeds" ..........................................     7
   2.9    "General Partner" .............................................     7
   2.10   "Gross Asset Value" ...........................................     7
   2.11   "Interest" ....................................................     8
   2.12   "Limited Partner" .............................................     8
   2.13   "Net Profits" or "Net Losses" .................................     8
   2.14   "Nonrecourse Deductions" ......................................     9
   2.15   "Nonrecourse Liability" .......................................     9
   2.16   "Partner Minimum Gain" ........................................     9
   2.17   "Partner Nonrecourse Debt" ....................................     9
   2.18   "Partner Nonrecourse Deductions" ..............................     9
   2.19   "Partners" ....................................................     9
   2.20   "Partnership" .................................................     9
   2.21   "Partnership Minimum Gain" ....................................     9
   2.22   "Partnership Property" ........................................     9
   2.23   "Percentage Interest" .........................................     9
   2.24   "Person" ......................................................     9
   2.25   "Recourse Liability" ..........................................     9
   2.26   "Regulations" .................................................     9
   2.27   "Reserves" ....................................................     9
   2.28   "Terminating Capital Transaction" .............................    10
   2.29   "Transfer" ....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS .......................    10
   3.1    Initial Capital Contributions of the Partners .................    10
   3.2    Additional Capital Contributions by the Partners ..............    10
   3.3    Capital Accounts ..............................................    10
   3.4    Other Matters .................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS ................................    11
   4.1    Distributions In General ......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions .............    11
   4.3    Allocation of Net Profits and Losses ..........................    11
   4.4    Additional Special Allocations ................................    11

ARTICLE 5. OPERATIONS ...................................................    14
   5.1    Management ....................................................    14
   5.2    Reimbursement .................................................    15
   5.3    Reports .......................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner ....................................................    15

ARTICLE 6. TRANSFERS ....................................................    16
   6.1    Transfers and Assignments .....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP ..    16
   7.1    Limitations ...................................................    16
   7.2    Exclusive Causes ..............................................    17
   7.3    Liquidation ...................................................    17
   7.4    No Capital Contribution Upon Dissolution ......................    17
   7.5    Notice of Dissolution .........................................    17

ARTICLE 8. MISCELLANEOUS ................................................    18
   8.1    Accounting and Fiscal Year ....................................    18
   8.2    Entire Agreement ..............................................    18
   8.3    Further Assurances ............................................    18
   8.4    Notices .......................................................    18
   8.5    Attorneys' Fees ...............................................    18
   8.6    Governing Law .................................................    18
   8.7    Amendments ....................................................    18
   8.8    Counterparts ..................................................    19
   8.9    Facsimile Signatures ..........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                         TEXAS CITYVIEW CARE CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Texas Cityview Care Center GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Texas Cityview Care Center, LP."
The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Texas Cityview Care
Center, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Texas Cityview Care Center GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15




Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                   TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Texas Cityview Care Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Texas Cityview Care Center GP, LLC          1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.205

                                                                  Exhibit 3.205

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

            TEXAS HERITAGE OAKS NURSING AND REHABILITATION CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Texas Heritage Oaks Nursing and
Rehabilitation Center, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

          Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

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


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.206

                                                                   Exhibit 3.206

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

            TEXAS HERITAGE OAKS NURSING AND REHABILITATION CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     4
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net Proceeds
           From Terminating Capital Transactions.........................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                        ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
            TEXAS HERITAGE OAKS NURSING AND REHABILITATION CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Texas Heritage Oaks Nursing and Rehabilitation
Center GP, LLC a Delaware limited liability company, as general partner (the
"General Partner"), and Summit Care Corporation, a California corporation (the
"Limited Partner"), for the purpose of continuing a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Texas Heritage Oaks Nursing and
Rehabilitation Center, LP." The Partnership may also do business at the same
time under one or more fictitious names if the General Partner determines that
such is in the best interests of the Partnership. The General Partner may from
time to time for reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.


                                       3



     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership, effective as of July 3, 2003, and by the General Partner
filing a Certificate of Limited Partnership with the Secretary of State of the
State of Delaware on July 3, 2003. The General Partner shall cause amendments to
the Certificate to be filed whenever required by the Act. Such amendments may be
executed by the General Partner. The existence of the Partnership as a separate
legal entity shall continue until the cancellation of its Certificate of Limited
Partnership in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Texas Heritage Oaks
Nursing and Rehabilitation Center, LP, and shall be a security governed by
Article 8 of the Uniform Commercial Code as in effect in the State of Delaware
and, to the extent permitted by applicable law, Article 8 of the Uniform
Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Texas Heritage Oaks Nursing and Rehabilitation
Center GP, LLC a Delaware limited liability company, and its permitted
successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        Texas Heritage Oaks Nursing and
                                        Rehabilitation Center GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1




                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Texas Heritage Oaks Nursing and
Rehabilitation Center GP, LLC               1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610


                                    EXHIBIT A

EX-3.207

                                                                   Exhibit 3.207

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             THE CLAIRMONT TYLER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is The Clairmont Tyler, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                           The Clairmont Tyler GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        The Clairmont Tyler GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.208

                                                                   Exhibit 3.208

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             THE CLAIRMONT TYLER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     4
   1.7  Registered Office; Agent for Service of Process..................     4
   1.8  Term.............................................................     4
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1  "Adjusted Capital Account Deficit"...............................     5
   2.2  "Agreement"......................................................     5
   2.3  "Capital Account"................................................     5
   2.4  "Capital Contributions"..........................................     6
   2.5  "Cash Available for Distribution"................................     6
   2.6  "Code"...........................................................     6
   2.7  "Depreciation"...................................................     6
   2.8  "Financing Proceeds".............................................     7
   2.9  "General Partner"................................................     7
   2.10 "Gross Asset Value"..............................................     7
   2.11 "Interest".......................................................     8
   2.12 "Limited Partner"................................................     8
   2.13 "Net Profits" or "Net Losses"....................................     8
   2.14 "Nonrecourse Deductions".........................................     9
   2.15 "Nonrecourse Liability"..........................................     9
   2.16 "Partner Minimum Gain"...........................................     9
   2.17 "Partner Nonrecourse Debt".......................................     9
   2.18 "Partner Nonrecourse Deductions".................................     9
   2.19 "Partners".......................................................     9
   2.20 "Partnership"....................................................     9
   2.21 "Partnership Minimum Gain".......................................     9
   2.22 "Partnership Property"...........................................     9
   2.23 "Percentage Interest"............................................     9
   2.24 "Person".........................................................     9
   2.25 "Recourse Liability".............................................     9
   2.26 "Regulations"....................................................     9
   2.27 "Reserves".......................................................     9
   2.28 "Terminating Capital Transaction"................................    10
   2.29 "Transfer".......................................................    10



                                        i




                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1  Initial Capital Contributions of the Partners....................    10
   3.2  Additional Capital Contributions by the Partners.................    10
   3.3  Capital Accounts.................................................    10
   3.4  Other Matters....................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1  Distributions In General.........................................    11
   4.2  Distributions of Cash Available for Distribution and Net
           Proceeds From Terminating Capital Transactions................    11
   4.3  Allocation of Net Profits and Losses.............................    11
   4.4  Additional Special Allocations...................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1  Management.......................................................    14
   5.2  Reimbursement....................................................    15
   5.3  Reports..........................................................    15
   5.4  Indemnification of General Partner; Liability of General
           Partner.......................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1  Transfers and Assignments........................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1  Limitations......................................................    16
   7.2  Exclusive Causes.................................................    17
   7.3  Liquidation......................................................    17
   7.4  No Capital Contribution Upon Dissolution.........................    17
   7.5  Notice of Dissolution............................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1  Accounting and Fiscal Year.......................................    18
   8.2  Entire Agreement.................................................    18
   8.3  Further Assurances...............................................    18
   8.4  Notices..........................................................    18
   8.5  Attorneys' Fees..................................................    18
   8.6  Governing Law....................................................    18
   8.7  Amendments.......................................................    18
   8.8  Counterparts.....................................................    19
   8.9  Facsimile Signatures.............................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                             THE CLAIRMONT TYLER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between The Clairmont Tyler GP, LLC a Delaware limited
liability company, as general partner (the "General Partner"), and Summit Care
Corporation, a California corporation (the "Limited Partner"), for the purpose
of continuing a limited partnership under the Delaware Revised Uniform Limited
Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "The Clairmont Tyler, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in The Clairmont
Tyler, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means The Clairmont Tyler GP, LLC a Delaware limited
liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c) Dissolution of the Partnership by law, including pursuant to a
decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        The Clairmont Tyler GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

The Clairmont Tyler GP, LLC                 1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.209

                                                                   Exhibit 3.209

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                       THE WOODLANDS HEALTHCARE CENTER, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is The Woodlands Healthcare Center,
LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                     The Woodlands Healthcare Center GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        The Woodlands Healthcare Center GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.210

                                                                   Exhibit 3.210

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                       THE WOODLANDS HEALTHCARE CENTER, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1     Formation.....................................................     3
   1.2     Name..........................................................     3
   1.3     Principal Place of Business...................................     3
   1.4     Business Purpose..............................................     3
   1.5     Certificate of Limited Partnership............................     3
   1.6     Fictitious Business Name Statements...........................     4
   1.7     Registered Office; Agent for Service of Process...............     4
   1.8     Term..........................................................     4
   1.9     Partnership Interests and Certificates........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1     "Adjusted Capital Account Deficit"............................     5
   2.2     "Agreement"...................................................     5
   2.3     "Capital Account".............................................     5
   2.4     "Capital Contributions".......................................     6
   2.5     "Cash Available for Distribution".............................     6
   2.6     "Code"........................................................     6
   2.7     "Depreciation"................................................     6
   2.8     "Financing Proceeds"..........................................     7
   2.9     "General Partner".............................................     7
   2.10    "Gross Asset Value"...........................................     7
   2.11    "Interest"....................................................     8
   2.12    "Limited Partner".............................................     8
   2.13    "Net Profits" or "Net Losses".................................     8
   2.14    "Nonrecourse Deductions"......................................     9
   2.15    "Nonrecourse Liability".......................................     9
   2.16    "Partner Minimum Gain"........................................     9
   2.17    "Partner Nonrecourse Debt"....................................     9
   2.18    "Partner Nonrecourse Deductions"..............................     9
   2.19    "Partners"....................................................     9
   2.20    "Partnership".................................................     9
   2.21    "Partnership Minimum Gain"....................................     9
   2.22    "Partnership Property"........................................     9
   2.23    "Percentage Interest".........................................     9
   2.24    "Person"......................................................     9
   2.25    "Recourse Liability"..........................................     9
   2.26    "Regulations".................................................     9
   2.27    "Reserves"....................................................     9
   2.28    "Terminating Capital Transaction".............................    10
   2.29    "Transfer"....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1     Initial Capital Contributions of the Partners.................    10
   3.2     Additional Capital Contributions by the Partners..............    10
   3.3     Capital Accounts..............................................    10
   3.4     Other Matters.................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1     Distributions In General......................................    11
   4.2     Distributions of Cash Available for Distribution and Net
              Proceeds From Terminating Capital Transactions.............    11
   4.3     Allocation of Net Profits and Losses..........................    11
   4.4     Additional Special Allocations................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1     Management....................................................    14
   5.2     Reimbursement.................................................    15
   5.3     Reports.......................................................    15
   5.4     Indemnification of General Partner; Liability of General
              Partner....................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1     Transfers and Assignments.....................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1     Limitations...................................................    16
   7.2     Exclusive Causes..............................................    17
   7.3     Liquidation...................................................    17
   7.4     No Capital Contribution Upon Dissolution......................    17
   7.5     Notice of Dissolution.........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1     Accounting and Fiscal Year....................................    18
   8.2     Entire Agreement..............................................    18
   8.3     Further Assurances............................................    18
   8.4     Notices.......................................................    18
   8.5     Attorneys' Fees...............................................    18
   8.6     Governing Law.................................................    18
   8.7     Amendments....................................................    18
   8.8     Counterparts..................................................    19
   8.9     Facsimile Signatures..........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                       THE WOODLANDS HEALTHCARE CENTER, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between The Woodlands Healthcare Center GP, LLC, a
Delaware limited liability company, as general partner (the "General Partner"),
and Summit Care Corporation, a California corporation (the "Limited Partner"),
for the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "The Woodlands Healthcare Center,
LP." The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in The Woodlands
Healthcare Center, LP and shall be a security governed by Article 8 of the
Uniform Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2  "AGREEMENT" means this Limited Partnership Agreement, as amended from
          time to time.

     2.3  "CAPITAL ACCOUNT" means the Capital Account maintained for each
          Partner in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means The Woodlands Healthcare Center GP, LLC, a
Delaware limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        The Woodlands Healthcare Center GP, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1




                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS              PERCENTAGE INTEREST
- ---------------------------------------   -------------------
                                       
Summit Care Corporation                           99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610

The Woodlands Healthcare Center GP, LLC           1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA  92610



                                    EXHIBIT A

EX-3.211

                                                                   Exhibit 3.211

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                           TOWN AND COUNTRY MANOR, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is Town and Country Manor, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                         Town and Country Manor GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        Town and Country Manor GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.212

                                                                   Exhibit 3.212

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                           TOWN AND COUNTRY MANOR, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================


                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1     Formation.....................................................     3
   1.2     Name..........................................................     3
   1.3     Principal Place of Business...................................     3
   1.4     Business Purpose..............................................     3
   1.5     Certificate of Limited Partnership............................     3
   1.6     Fictitious Business Name Statements...........................     4
   1.7     Registered Office; Agent for Service of Process...............     4
   1.8     Term..........................................................     4
   1.9     Partnership Interests and Certificates........................     4

ARTICLE 2. DEFINITIONS ..................................................     5
   2.1     "Adjusted Capital Account Deficit"............................     5
   2.2     "Agreement"...................................................     5
   2.3     "Capital Account".............................................     5
   2.4     "Capital Contributions".......................................     6
   2.5     "Cash Available for Distribution".............................     6
   2.6     "Code"........................................................     6
   2.7     "Depreciation"................................................     6
   2.8     "Financing Proceeds"..........................................     7
   2.9     "General Partner".............................................     7
   2.10    "Gross Asset Value"...........................................     7
   2.11    "Interest"....................................................     8
   2.12    "Limited Partner".............................................     8
   2.13    "Net Profits" or "Net Losses".................................     8
   2.14    "Nonrecourse Deductions"......................................     9
   2.15    "Nonrecourse Liability".......................................     9
   2.16    "Partner Minimum Gain"........................................     9
   2.17    "Partner Nonrecourse Debt"....................................     9
   2.18    "Partner Nonrecourse Deductions"..............................     9
   2.19    "Partners"....................................................     9
   2.20    "Partnership".................................................     9
   2.21    "Partnership Minimum Gain"....................................     9
   2.22    "Partnership Property"........................................     9
   2.23    "Percentage Interest".........................................     9
   2.24    "Person"......................................................     9
   2.25    "Recourse Liability"..........................................     9
   2.26    "Regulations".................................................     9
   2.27    "Reserves"....................................................     9
   2.28    "Terminating Capital Transaction".............................    10
   2.29    "Transfer"....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1     Initial Capital Contributions of the Partners.................    10
   3.2     Additional Capital Contributions by the Partners..............    10
   3.3     Capital Accounts..............................................    10
   3.4     Other Matters.................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1     Distributions In General......................................    11
   4.2     Distributions of Cash Available for Distribution and Net
              Proceeds From Terminating Capital Transactions.............    11
   4.3     Allocation of Net Profits and Losses..........................    11
   4.4     Additional Special Allocations................................    11

ARTICLE 5. OPERATIONS ...................................................    14
   5.1     Management...................................................     14
   5.2     Reimbursement................................................     15
   5.3     Reports......................................................     15
   5.4     Indemnification of General Partner; Liability of General
             Partner....................................................     15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1     Transfers and Assignments....................................     16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1     Limitations..................................................     16
   7.2     Exclusive Causes.............................................     17
   7.3     Liquidation..................................................     17
   7.4     No Capital Contribution Upon Dissolution.....................     17
   7.5     Notice of Dissolution........................................     17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1     Accounting and Fiscal Year...................................     18
   8.2     Entire Agreement.............................................     18
   8.3     Further Assurances...........................................     18
   8.4     Notices......................................................     18
   8.5     Attorneys' Fees..............................................     18
   8.6     Governing Law................................................     18
   8.7     Amendments...................................................     18
   8.8     Counterparts.................................................     19
   8.9     Facsimile Signatures.........................................     19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                           TOWN AND COUNTRY MANOR, LP

          THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between Town and Country Manor GP, LLC a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "Town and Country Manor, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                       3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 Partnership Interests and Certificates. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in Town and Country
Manor, LP and shall be a security governed by Article 8 of the Uniform
Commercial Code as in effect in the State of Delaware and, to the extent
permitted by applicable law, Article 8 of the Uniform Commercial Code of each
other applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                       4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

          2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                       5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                       6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means Town and Country Manor GP, LLC a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                       7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                       8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                       9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10


Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18


     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19




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

                                        "GENERAL PARTNER"

                                        Town and Country Manor GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Town and Country Manor GP, LLC             1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610



                                    EXHIBIT A

EX-3.213

                                                                   Exhibit 3.213

                                STATE OF DELAWARE
                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                             TRAVELMARK STAFFING, LP

     The Undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter 17,
do hereby certify a follows:

     1.   The name of the limited partnership is: TRAVELMARK STAFFING, LP

     2.   The address of its registered office and the name and the address of
          the registered agent of the limited partnership is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     3.   The name and mailing address of the sole general partner is:

               Skilled Dialysis, LLC
               27442 Portola Parkway, Suite 200
               Foothill Ranch, CA 92610

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership of to be
duly executed as of the 23rd day of June, 2005.

                                        Travelmark Staffing, LLC
                                        General Partner


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary

EX-3.214

                                                                   Exhibit 3.214

================================================================================

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                             TRAVELMARK STAFFING, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 11, 2005

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1  Formation........................................................     3
   1.2  Name.............................................................     3
   1.3  Principal Place of Business......................................     3
   1.4  Business Purpose.................................................     3
   1.5  Certificate of Limited Partnership...............................     3
   1.6  Fictitious Business Name Statements..............................     3
   1.7  Registered Office; Agent for Service of Process..................     3
   1.8  Term.............................................................     3
   1.9  Partnership Interests and Certificates...........................     4

ARTICLE 2. DEFINITIONS...................................................     4
   2.1  "Adjusted Capital Account Deficit"...............................     4
   2.2  "Agreement"......................................................     4
   2.3  "Capital Account"................................................     4
   2.4  "Capital Contributions"..........................................     5
   2.5  "Cash Available for Distribution"................................     5
   2.6  "Code"...........................................................     5
   2.7  "Depreciation"...................................................     5
   2.8  "Financing Proceeds".............................................     5
   2.9  "General Partner"................................................     6
   2.10 "Gross Asset Value"..............................................     6
   2.11 "Interest".......................................................     6
   2.12 "Net Profits" or "Net Losses"....................................     7
   2.13 "Nonrecourse Deductions".........................................     7
   2.14 "Nonrecourse Liability"..........................................     7
   2.15 "Partner Minimum Gain"...........................................     7
   2.16 "Partner Nonrecourse Debt".......................................     7
   2.17 "Partner Nonrecourse Deductions".................................     7
   2.18 "Partners".......................................................     7
   2.19 "Partnership"....................................................     7
   2.20 "Partnership Minimum Gain".......................................     7
   2.21 "Partnership Property"...........................................     7
   2.22 "Percentage Interest"............................................     7
   2.23 "Person".........................................................     8
   2.24 "Recourse Liability".............................................     8
   2.25 "Regulations"....................................................     8
   2.26 "Reserves".......................................................     8
   2.27 "Terminating Capital Transaction"................................     8
   2.28 "Transfer".......................................................     8

ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................     8
   3.1  Initial Capital Contributions of the Partners....................     8
   3.2  Additional Capital Contributions by the Partners.................     8
   3.3  Capital Accounts.................................................     8
   3.4  Other Matters....................................................     8

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................     9
   4.1  Distributions In General.........................................     9



                                        i



                                                                         
   4.2  Distributions of Cash Available for Distribution and Net
        Proceeds From Terminating Capital Transactions...................     9
   4.3  Allocation of Net Profits and Losses.............................     9
   4.4  Additional Special Allocations...................................     9

ARTICLE 5. OPERATIONS....................................................    11
   5.1  Management.......................................................    11
   5.2  Reimbursement....................................................    12
   5.3  Reports..........................................................    12
   5.4  Indemnification of General Partner; Liability of General
        Partner..........................................................    12

ARTICLE 6. TRANSFERS.....................................................    13
   6.1  Transfers and Assignments........................................    13

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    13
   7.1  Limitations......................................................    13
   7.2  Exclusive Causes.................................................    13
   7.3  Liquidation......................................................    13
   7.4  No Capital Contribution Upon Dissolution.........................    14
   7.5  Notice of Dissolution............................................    14

ARTICLE 8. MISCELLANEOUS.................................................    14
   8.1  Accounting and Fiscal Year.......................................    14
   8.2  Entire Agreement.................................................    14
   8.3  Further Assurances...............................................    14
   8.4  Notices..........................................................    14
   8.5  Attorneys' Fees..................................................    14
   8.6  Governing Law....................................................    14
   8.7  Amendments.......................................................    14
   8.8  Counterparts.....................................................    14
   8.9  Facsimile Signatures.............................................    15




                                       ii



                        LIMITED PARTNERSHIP AGREEMENT OF
                             TRAVELMARK STAFFING, LP

THIS LIMITED PARTNERSHIP AGREEMENT (this "Agreement") is made and entered into
effective as of July 11, 2005 (the "Effective Date"), by and between Travelmark
Staffing, LLC, a Delaware limited liability company, as general partner (the
"General Partner"), and Hallmark Investment Group, Inc., a Delaware corporation
(the "Limited Partner"), for the purpose of forming a limited partnership under
the Delaware Revised Uniform Limited Partnership Act (the "Act").

                             ARTICLE I. ORGANIZATION

1.1 FORMATION. The General Partner and the Limited Partner hereby form the
Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

1.2 NAME. The name of the Partnership shall be "Travelmark Staffing, LP." The
Partnership may also do business at the same time under one or more fictitious
names if the General Partner determines that such is in the best interests of
the Partnership. The General Partner may from time to time for reasonable cause
change the name of the Partnership.

1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 27442 Portola Parkway, Suite 200, Foothill Ranch, CA 92610, or such
other place as the General Partner may from time to time designate by notice to
the Limited Partner. The Partnership may maintain offices at such other place or
places within or outside the State of Delaware as the General Partner deems
advisable.

1.4 BUSINESS PURPOSE

     (a)  The Partnership may engage in any lawful act or activity for which a
          limited partnership may be engaged under applicable law (including,
          without limitation, the Act).

     (b)  The General Partner and the Limited Partner shall have the right to
          engage or invest in any business activity, enterprise or venture
          regardless whether such activity, enterprise or venture competes with
          the Partnership's activities, enterprises or ventures, and neither the
          General Partner nor the Limited Partner shall not have any obligation
          to offer any business opportunity to the Partnership, the General
          Partner or the Limited Partner.

1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a limited
partnership under the Act by the General Partner filing a Certificate of Limited
Partnership with the Secretary of State of the State of Delaware on July 11,
2005. The General Partner shall cause amendments to the Certificate to be filed
whenever required by the Act. Such amendments may be executed by the General
Partner. The existence of the Partnership as a separate legal entity shall
continue until the cancellation of its Certificate of Limited Partnership in
accordance with the Act.

1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 160
Greentree Drive, Suite 101, Dover, Delaware 19904, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

1.8 TERM. The term of the Partnership shall commence on the date that the
Certificate is filed with the Office of the Delaware Secretary of State, and
shall continue until the Partnership is dissolved pursuant to this Agreement.


                                        3



1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

"This certificate evidences a [LP][GP] interest in Travelmark Staffing, LP and
shall be a security governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and, to the extent permitted by applicable law,
Article 8 of the Uniform Commercial Code of each other applicable jurisdiction."

"THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT NEGOTIABLE
AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS OF
THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains books for the
purpose of registering transfers. This Certificate has not been and will not be
registered under the Securities Act of 1933 or under the securities or blue sky
laws of any state. The holder of this Certificate, by its acceptance hereof,
represents that it is acquiring this security for investment and not with a view
to any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

                             ARTICLE II. DEFINITIONS

The following capitalized words and phrases used in this Agreement shall have
the following meanings:

2.1 "Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant fiscal year, after giving effect to the following adjustments:

     2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

     2.1.2 Subtract from such Capital Account, such Partner's share of the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

     2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

2.2 "Agreement" means this Limited Partnership Agreement, as amended from time
to time.

2.3 "Capital Account" means the Capital Account maintained for each Partner in
accordance with the following provisions:

     2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

     2.3.2 From each Partner's Capital Account there shall be subtracted (a) the
amount of (i) cash and (ii) the Gross Asset Value of any Partnership Property
distributed to such Partner pursuant to any


                                        4



provision of this Agreement, (b) such Partner's allocable share of Net Losses
and any other items in the nature of expenses or losses that are specially
allocated to such Partner pursuant to Article 4 and (c) the amount of any
liabilities of such Partner assumed by the Partnership or which are secured by
any property contributed by such Partner to the Partnership.

     2.3.3 In determining the amount of any liability for purposes of Section
2.3.1 and Section 2.3.2, there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and the Regulations.

     2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

     2.3.5 The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and applied
in a manner consistent with such Regulations. In the event that the General
Partner shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

2.4 "Capital Contributions" means, with respect to any Partner, the amount of
money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

2.5 "Cash Available for Distribution" means, with respect to any fiscal year,
all Partnership cash receipts (but excluding any proceeds from a Terminating
Capital Transaction), after deducting payments for operating cash expenses and
any other amounts set aside for the restoration, increase or creation of
Reserves. Notwithstanding the foregoing, Cash Available for Distribution shall
not include Financing Proceeds.

2.6 "Code" means the Internal Revenue Code of 1986, as amended from time to time
(or any corresponding provisions of succeeding law).

2.7 "Depreciation" means, for each fiscal year, an amount equal to the federal
income tax depreciation, amortization or other cost recovery deduction allowable
with respect to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year, Depreciation shall be an amount that
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization or other cost recovery deduction for such year or
other period bears to such beginning adjusted tax basis; provided, however, that
if the federal income tax depreciation, amortization or other cost recovery
deduction for such year is zero, Depreciation shall be determined with reference
to such beginning Gross Asset Value using any reasonable method selected by the
General Partner.

2.8 "Financing Proceeds" means the net proceeds from any loan secured by all or
any portion of the Partnership's real property (including any refinancing) that
remain after the repayment of any


                                        5



indebtedness of the Partnership secured by all or a portion of such real
property with such proceeds and all costs related to such loan.

2.9 "General Partner" means Travelmark Staffing, LLC, a Delaware limited
liability company, and its permitted successors and assigns.

2.10 "Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:

     2.10.1 The initial Gross Asset Value of any asset contributed by a Partner
to the Partnership shall be the gross fair market value of such asset, as
determined by the General Partner and the Limited Partner.

     2.10.2 The Gross Asset Values of all Partnership assets immediately prior
to the occurrence of any event described in subsection (a), subsection (b),
subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

     2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

     2.10.4 The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this Section 2.10.4 to the
extent that the General Partner reasonably determines that an adjustment
pursuant to subsection (b) of Section 2.10.2 above is necessary or appropriate
in connection with a transaction that would otherwise result in an adjustment
pursuant to this Section 2.10.4.

     2.10.5 If the Gross Asset Value of a Partnership asset has been determined
or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section 2.10.4 hereof,
such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Net Income and
Net Losses.

2.11 "Interest" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.


                                       6



2.12 "Net Profits" or "Net Losses" means, for each fiscal year or other period,
an amount equal to the Partnership's taxable income or loss for such year or
period determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

     2.12.1 Any income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this Section 2.12 shall be added to such taxable income or loss;

     2.12.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

     2.12.3 Gain or loss resulting from any disposition of Partnership Property
where such gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the Partnership Property
disposed of, notwithstanding that the adjusted tax basis of such Partnership
Property differs from its Gross Asset Value;

     2.12.4 If the Gross Asset Value of any Partnership asset is adjusted in
accordance with the terms of this Agreement, the amount of such adjustment shall
be taken into account in the taxable year of such adjustment as gain or loss
from the disposition of such asset for purposes of computing Net Profits or Net
Losses;

     2.12.5 Notwithstanding any other provision of this Section 2.12, any items
that are specially allocated pursuant to Section 4.4 hereof shall not be taken
into account in computing Net Profits or Net Losses.

2.16 "Nonrecourse Deductions" has the meaning set forth in Regulations Sections
1.704-2(b)(1) and 1.704-2(c).

2.17 "Nonrecourse Liability" has the meaning set forth in Regulations Sections
1.704-2(b)(3) and 1.752-1(a)(2).

2.18 "Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

2.19 "Partner Nonrecourse Debt" has the meaning set forth in Regulations Section
1.704-2(b)(4).

2.20 "Partner Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(i).

2.21 "Partners" means the General Partner and the Limited Partner.

2.22 "Partnership" means the Delaware limited partnership governed by this
Agreement.

2.23 "Partnership Minimum Gain" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

2.24 "Partnership Property" means all direct and indirect interests in real and
personal property owned by the Partnership from time to time and shall include
both tangible and intangible property (including cash).

2.25 "Percentage Interest" means with respect to each Partner, the percentage of
outstanding Interests held by such Partner as evidenced by a Partnership
Certificate, which percentage shall be set


                                        7



forth opposite such Partner's name on Exhibit A attached hereto as it may be
amended or supplemented from time to time.

2.26 "Person" means any individual, corporation, partnership, joint venture,
limited liability partnership, limited liability company, association, joint
stock company, trust, unincorporated organization, whether or not a legal entity
or other business or governmental entity.

2.27 "Recourse Liability" has the meaning set forth in Regulations Section
1.752-1(a)(1).

2.28 "Regulations" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

2.29 "Reserves" means, with respect to any fiscal year or other period, funds
set aside or amounts allocated during such period to reserves that shall be
maintained in amounts deemed sufficient by the General Partner for working
capital, to pay taxes, insurance, debt service, and other costs or expenses
incident to the ownership of the Partnership Property and the conduct of
business by the Partnership as contemplated hereunder.

2.30 "Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

2.31 "Transfer" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

               ARTICLE III. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made or
been credited with the Capital Contributions to the Partnership reflected in the
Capital Account established for each Partner.

3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the Partners
shall be required to and no Partner has the right to make any additional Capital
Contributions to the Partnership, except that the Partners shall make such
additional Capital Contributions as provided below in this Section 3.2.

     3.2.1 If the General Partner determines, at any time and from time to time,
that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

Notwithstanding anything to the contrary in this Agreement, with respect to any
future Capital

     3.2.2 Contributions, the actual making of such Capital Contributions by the
Partners in proportion to their Percentage Interests shall be deemed to have
been made pursuant to an Additional Capital Requirement Notice, whether written
or oral.

3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained for
each Partner in accordance with the terms of this Agreement.

3.4 OTHER MATTERS

     3.4.1 Except as otherwise provided in this Agreement, a Partner shall not
demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the Partnership as a return of
capital


                                        8



on account of such Capital Contributions without, in each instance, the approval
of both Partners. Under circumstances requiring or permitting a return of its
Capital Contributions, the Partners shall have the right to receive property
other than cash as reasonably determined by the General Partner, except as may
be specifically prohibited herein.

     3.4.2 Except as otherwise provided by the Act, neither the General Partner
nor the Limited Partner shall be liable for the debts, liabilities, contracts or
any other obligations of the Partnership, nor shall the General Partner or the
Limited Partner be required to lend any funds to the Partnership.

                    ARTICLE IV. ALLOCATIONS AND DISTRIBUTIONS

4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7 hereof
and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year all
Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS. Subject to Article 7 hereof, any Cash
Available for Distribution shall be distributed to the Partners in proportion to
their Percentage Interests.

     4.2.1 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

     4.2.2 All amounts withheld pursuant to the Code or any provision of any
state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net Profits,
Net Losses and any other items of income, gain, loss and deduction for any
fiscal year shall be allocated, for purposes of adjusting the Capital Accounts
of the Partners, in proportion to the Partners' Percentage Interests.

4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing provisions of
this Article 4:

     4.4.1 Tax items with respect to Partnership Property that is contributed to
the Partnership with a Gross Asset Value that varies from its basis in the hands
of the contributing Partner immediately preceding the date of contribution shall
be allocated between the Partners for income tax purposes pursuant to
Regulations promulgated under Code Section 704(c) so as to take into account
such variation. The Partnership shall account for such variation under any
method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted pursuant to Section 2.10.2, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations promulgated thereunder.
Allocations pursuant to this Section 4.4.1 are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of Net Profits, Net Losses
and any other items or distributions pursuant to any provision of this
Agreement.

     4.4.2 The Nonrecourse Deductions for each taxable year of the Partnership
shall be allocated to the Partners in proportion to their Percentage Interests.

     4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This


                                        9



Section 4.4.3 is intended to comply with the minimum gain chargeback requirement
of Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith. The allocation otherwise required pursuant to this Section 4.4.3
shall, however, not apply to a Partner to the extent that the minimum gain
chargeback rules are inapplicable in a particular circumstance.

     4.4.4 The Partner Nonrecourse Deductions shall be allocated each year to
the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

     4.4.5 If there is a net decrease in Partner Minimum Gain attributable to a
Partner Nonrecourse Debt during any Partnership taxable year, each Partner who
has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such taxable year
(and, if necessary, subsequent years) in an amount equal to such Partner's share
of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in a manner consistent with the provisions of
Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended to comply with
the partner nonrecourse debt minimum gain chargeback requirement of Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

     4.4.6 If any Partner unexpectedly receives an adjustment, allocation or
distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).

     4.4.7 In the event that any Partner has a deficit Capital Account at the
end of any fiscal year that is in excess of the sum of (1) the amount (if any)
that such Partner is obligated to restore to the Partnership upon liquidation of
such Partner's Partnership Interest and (2) the amount such Partner is deemed to
be obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section 4.4.7
shall be made if and only to the extent that such Partner would have a deficit
Capital Account in excess of such sum after all other allocations provided in
this Article 4 have been tentatively made as if this Section 4.4.7 and Section
4.4.6 hereof were not in the Agreement.

     4.4.8 If the allocation of Net Loss to a Partner as provided in Section 4.3
hereof would create or increase an Adjusted Capital Account Deficit, there shall
be allocated to such Partner only that amount of Net Loss as will not create or
increase an Adjusted Capital Account Deficit. The Net Loss that would, absent
the application of the preceding sentence, otherwise be allocated to such
Partner shall be allocated to the other Partners pro rata to the allocation of
other Losses to such Partner, subject to the limitations set forth in this
Section 4.4.8.

     4.4.9 To the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.


                                       10



     4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4, 4.4.5,
4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are intended
to comply with certain requirements of Regulations Sections 1.704-1(b) and
1.704-2(i). The Regulatory Allocations may not be consistent with the manner in
which the Partners intend to distribute the cash of the Partnership or allocate
Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

     4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9 hereof,
but notwithstanding the other foregoing provisions of this Article 4, at all
times during the existence of the Partnership the General Partner's interest in
each item of Partnership income, gain, loss, deduction or credit shall equal at
least one percent (1%) of each of those items.

     4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

ARTICLE V. OPERATIONS

5.1 MANAGEMENT

     5.1.1 The business and affairs of the Partnership shall be managed
exclusively by the General Partner. The General Partner shall have full and
complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       11



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

     5.1.2 Except as expressly provided in this Agreement, the Limited Partner
shall have no right to vote on or consent to any other matter, act, decision or
document involving the Partnership or its business, including any vote provided
for in the Act.

5.2 Reimbursement. Subject to Article 8 hereof, the General Partner shall be
entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

5.3 Reports. The General Partner shall cause to be kept, at the principal place
of business of the Partnership, or at such other location as the General Partner
shall reasonably deem appropriate or advisable, full and proper ledgers and
other books of account of all receipts and disbursements and other financial
activities of the Partnership.

     5.3.1 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER

     5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

     5.4.2 Expenses incurred by an Indemnitee in defending any claim, demand,
action, suit or proceeding subject to this Section 5.4 shall be advanced by the
Partnership prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Partnership of a written commitment by or on
behalf of the Indemnitee to repay such amount if it shall be determined that
such Indemnitee is not entitled to be indemnified as authorized in this Section
5.4.

     5.4.3 The indemnification provided by this Section 5.4 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to a vote of the Partners, as a matter of law or equity or otherwise,
and shall inure to the benefit of the heirs, successors, assigns and

     5.4.4 administrators of the Indemnitee. Any indemnification provided
hereunder shall be satisfied solely out of the assets of the Partnership.
Neither the General Partner nor the Limited Partner shall be subject to personal
liability by reason of these indemnification provisions.

     5.4.5 No Indemnitee shall be denied indemnification in whole or in part
under this Section 5.4 by reason of the fact that the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.


                                       12



The provisions of this Section 5.4 are for the benefit of the Indemnitees and
shall not be deemed to create any rights for the benefit of any other Person.

     5.4.6 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                              ARTICLE VI. TRANSFERS

6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

ARTICLE VII. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and terminated
pursuant to and only pursuant to the provisions of this Article 7, and the
parties hereto do hereby irrevocably waive any and all other rights they may
have to cause a dissolution of the Partnership or a sale or partition of any or
all of the Partnership's assets.

7.2 EXCLUSIVE CAUSES. The following and only the following events shall cause
the Partnership to be dissolved, liquidated and terminated:

     (a)  The unanimous election of the Partners;

     (b)  The occurrence of an event of withdrawal of the General Partner;
          provided, however, the events set forth at Sections 17-402(a)(4) and
          (5) of the Act shall not constitute events of withdrawal of the
          General Partner and upon the occurrence of any such event the General
          Partner shall not cease to be general partner of the Partnership and
          the Partnership shall continue without dissolution; and

     (c)  Dissolution of the Partnership by law, including pursuant to a decree
          of judicial dissolution under Section 17-802 of the Act.

7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the business of
the Partnership shall be continued to the extent necessary to allow an orderly
winding up of its affairs, including the liquidation of the Partnership pursuant
to the provisions of this Section 7.3, and, as promptly as practicable, each of
the following shall be accomplished:

     (a)  The Partnership Property shall be liquidated in an orderly,
          businesslike and commercially reasonable manner.

     (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
          deduction realized by the Partnership upon the sale of the Partnership
          Property or transfer in kind shall be deemed recognized and allocated
          to the Partners in the manner set forth in Article 4 hereof.

     (c)  The proceeds of sale of Partnership assets and all other assets of the
          Partnership shall first be applied to satisfaction of all Partnership
          debts in accordance with the Act and to the establishment of any
          necessary Reserves, and then shall be distributed to the Partners in
          proportion to and to the extent of positive balances in their
          respective Capital Accounts.


                                       13



7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look solely to
the assets of the Partnership for all distributions with respect to the
Partnership, its Capital Contribution thereto, its Capital Account, its share of
Net Profits or Net Losses or other items and shall have no recourse therefor
(upon dissolution or otherwise) against any Partner. No Partner shall be
obligated to restore to the Partnership any negative balance that may exist or
continue in such Partner's Capital Account.

7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section 7.2
occurs, the General Partner shall, within thirty (30) days thereafter, provide
written notice thereof to each of the Limited Partner and to all other parties
with whom the Partnership regularly conducts business (as determined in the
discretion of the General Partner).

                           ARTICLE VIII. MISCELLANEOUS

8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of the
Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof and fully supersedes
any and all prior agreements or understandings between the parties hereto
pertaining to the subject matter hereof.

8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

8.4 NOTICES. Any notice, consent, payment, demand, or communication required or
permitted to be given by any provision of this Agreement shall be in writing and
shall be delivered personally to the Person or to an officer of the Person to
whom the same is directed, or sent by registered or certified mail, return
receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by any
Partner or by the Partnership as against the Partnership or any other Partner to
enforce any of the covenants or conditions hereof, the party in whose favor
final judgment shall be entered shall be entitled to have and recover of and
from the other reasonable attorneys' fees to be fixed by the court wherein said
judgment be entered.

8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

8.9 AMENDMENTS. No amendments to this Agreement shall be effective without the
prior written approval of all of the Partners, which approval may be given or
withheld in the sole and absolute discretion of a Partner.

8.10 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


                                       14



8.11 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       15



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

                                        "GENERAL PARTNER"

                                        TRAVELMARK STAFFING, LLC,
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                        "LIMITED PARTNER"

                                        HALLMARK INVESTMENT GROUP, INC.,
                                        a Delaware corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Travelmark Staffing, LLC                    1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

Hallmark Investment Group, Inc.            99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                                                       EXHIBIT A

EX-3.215

                                                                   Exhibit 3.215

                       CERTIFICATE OF LIMITED PARTNERSHIP

                                       OF

                          WEST SIDE CAMPUS OF CARE, LP

     The undersigned, desiring to form a limited partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act, 6 Delaware Code, Chapter
17-201, does hereby certify as follows:

     1. The name of the limited partnership is West Side Campus of Care, LP.

     2. The name and address, including street, number, city and county, of the
registered agent and registered office of the limited partnership in the State
of Delaware are:

                        National Registered Agents, Inc.
                       9 East Loockerman Street, Suite 1B
                       Dover, Kent County, Delaware 19901

     3. The name and mailing address of the general partner is:

                        West Side Campus of Care GP, LLC
                                  19365 FM 2252
                                     Suite 5
                            Garden Ridge, Texas 78266

     IN WITNESS WHEREOF, the undersigned, being the sole general partner of the
limited partnership, has caused this Certificate of Limited Partnership to be
duly executed as of the 3rd day of July, 2003.

                                        West Side Campus of Care GP, LLC
                                        General Partner


                                        By: /s/ John Harrison
                                            ------------------------------------
                                            John Harrison
                                            Chief Financial Officer

EX-3.216

                                                                   Exhibit 3.216

================================================================================

                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                          WEST SIDE CAMPUS OF CARE, LP
                         A DELAWARE LIMITED PARTNERSHIP

                            DATED AS OF JULY 20, 2004

================================================================================



                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1. ORGANIZATION..................................................     3
   1.1    Formation......................................................     3
   1.2    Name...........................................................     3
   1.3    Principal Place of Business....................................     3
   1.4    Business Purpose...............................................     3
   1.5    Certificate of Limited Partnership.............................     3
   1.6    Fictitious Business Name Statements............................     4
   1.7    Registered Office; Agent for Service of Process................     4
   1.8    Term...........................................................     4
   1.9    Partnership Interests and Certificates.........................     4

ARTICLE 2. DEFINITIONS...................................................     5
   2.1    "Adjusted Capital Account Deficit".............................     5
   2.2    "Agreement"....................................................     5
   2.3    "Capital Account"..............................................     5
   2.4    "Capital Contributions"........................................     6
   2.5    "Cash Available for Distribution"..............................     6
   2.6    "Code".........................................................     6
   2.7    "Depreciation".................................................     6
   2.8    "Financing Proceeds"...........................................     7
   2.9    "General Partner"..............................................     7
   2.10   "Gross Asset Value"............................................     7
   2.11   "Interest".....................................................     8
   2.12   "Limited Partner"..............................................     8
   2.13   "Net Profits" or "Net Losses"..................................     8
   2.14   "Nonrecourse Deductions".......................................     9
   2.15   "Nonrecourse Liability"........................................     9
   2.16   "Partner Minimum Gain".........................................     9
   2.17   "Partner Nonrecourse Debt".....................................     9
   2.18   "Partner Nonrecourse Deductions"...............................     9
   2.19   "Partners".....................................................     9
   2.20   "Partnership"..................................................     9
   2.21   "Partnership Minimum Gain".....................................     9
   2.22   "Partnership Property".........................................     9
   2.23   "Percentage Interest"..........................................     9
   2.24   "Person".......................................................     9
   2.25   "Recourse Liability"...........................................     9
   2.26   "Regulations"..................................................     9
   2.27   "Reserves".....................................................     9
   2.28   "Terminating Capital Transaction"..............................    10
   2.29   "Transfer".....................................................    10



                                        i



                                                                         
ARTICLE 3. CAPITAL; CAPITAL ACCOUNTS AND PARTNERS........................    10
   3.1    Initial Capital Contributions of the Partners..................    10
   3.2    Additional Capital Contributions by the Partners...............    10
   3.3    Capital Accounts...............................................    10
   3.4    Other Matters..................................................    10

ARTICLE 4. ALLOCATIONS AND DISTRIBUTIONS.................................    11
   4.1    Distributions In General.......................................    11
   4.2    Distributions of Cash Available for Distribution and Net
             Proceeds From Terminating Capital Transactions..............    11
   4.3    Allocation of Net Profits and Losses...........................    11
   4.4    Additional Special Allocations.................................    11

ARTICLE 5. OPERATIONS....................................................    14
   5.1    Management.....................................................    14
   5.2    Reimbursement..................................................    15
   5.3    Reports........................................................    15
   5.4    Indemnification of General Partner; Liability of General
             Partner.....................................................    15

ARTICLE 6. TRANSFERS.....................................................    16
   6.1    Transfers and Assignments......................................    16

ARTICLE 7. DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP...    16
   7.1    Limitations....................................................    16
   7.2    Exclusive Causes...............................................    17
   7.3    Liquidation....................................................    17
   7.4    No Capital Contribution Upon Dissolution.......................    17
   7.5    Notice of Dissolution..........................................    17

ARTICLE 8. MISCELLANEOUS.................................................    18
   8.1    Accounting and Fiscal Year.....................................    18
   8.2    Entire Agreement...............................................    18
   8.3    Further Assurances.............................................    18
   8.4    Notices........................................................    18
   8.5    Attorneys' Fees................................................    18
   8.6    Governing Law..................................................    18
   8.7    Amendments.....................................................    18
   8.8    Counterparts...................................................    19
   8.9    Facsimile Signatures...........................................    19




                                       ii



                           SECOND AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                          WEST SIDE CAMPUS OF CARE, LP

     THIS SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") is made and entered into effective as of July 20, 2004 (the
"Effective Date"), by and between West Side Campus of Care, GP, LLC, a Delaware
limited liability company, as general partner (the "General Partner"), and
Summit Care Corporation, a California corporation (the "Limited Partner"), for
the purpose of continuing a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (the "Act").

                                   ARTICLE 1.
                                  ORGANIZATION

     1.1 FORMATION. The General Partner and the Limited Partner hereby continue
the Partnership under the Act for the purposes and upon the terms and conditions
hereinafter set forth. The rights and liabilities of the General Partner and the
Limited Partner shall be as provided in the Act, except as otherwise expressly
provided herein.

     1.2 NAME. The name of the Partnership is "West Side Campus of Care, LP."
The Partnership may also do business at the same time under one or more
fictitious names if the General Partner determines that such is in the best
interests of the Partnership. The General Partner may from time to time for
reasonable cause change the name of the Partnership.

     1.3 PRINCIPAL PLACE OF BUSINESS. The principal office of the Partnership is
located at 19365 FM 2252, Suite 5, Garden Ridge, TX 78266, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partner. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

     1.4 BUSINESS PURPOSE.

          (a)  The Partnership may engage in any lawful act or activity for
               which a limited partnership may be engaged under applicable law
               (including, without limitation, the Act).

          (b)  The General Partner and the Limited Partner shall have the right
               to engage or invest in any business activity, enterprise or
               venture regardless whether such activity, enterprise or venture
               competes with the Partnership's activities, enterprises or
               ventures, and neither the General Partner nor the Limited Partner
               shall not have any obligation to offer any business opportunity
               to the Partnership, the General Partner or the Limited Partner.

     1.5 CERTIFICATE OF LIMITED PARTNERSHIP. The Partnership was formed as a
limited partnership under the Act by the initial Limited Partnership Agreement
of the Partnership,


                                        3



effective as of July 3, 2003, and by the General Partner filing a Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on July
3, 2003. The General Partner shall cause amendments to the Certificate to be
filed whenever required by the Act. Such amendments may be executed by the
General Partner. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of its Certificate of Limited Partnership
in accordance with the Act.

     1.6 FICTITIOUS BUSINESS NAME STATEMENTS. Following the execution of this
Agreement, fictitious business name statements shall be filed and published when
and if the General Partner determines it to be necessary. Any such statement
shall be renewed as required by law.

     1.7 REGISTERED OFFICE; AGENT FOR SERVICE OF PROCESS. The address of the
registered office of the Partnership in the State of Delaware is located at 9
East Loockerman Street, Suite 1B, Dover, Delaware 19901, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc.

     1.8 TERM. The term of the Partnership commenced on the date that the
Certificate was filed with the Office of the Delaware Secretary of State and
shall continue until the Partnership is dissolved pursuant to this Agreement.

     1.9 PARTNERSHIP INTERESTS AND CERTIFICATES. The General Partner and Limited
Partner shall each receive a Partnership Certificate evidencing their respective
Interest in the Partnership (the "Partnership Certificates"). The Partnership
hereby irrevocably elects that all Interests in the Partnership shall be
securities governed by Article 8 of the Uniform Commercial Code as in effect in
the State of Delaware and each other applicable jurisdiction. Each Partnership
Certificate shall bear the following legends:

          "This certificate evidences a [LP][GP] interest in West Side Campus of
Care, LP and shall be a security governed by Article 8 of the Uniform Commercial
Code as in effect in the State of Delaware and, to the extent permitted by
applicable law, Article 8 of the Uniform Commercial Code of each other
applicable jurisdiction."

          "THIS CERTIFICATE AND THE [LP][GP] INTEREST EVIDENCED HEREBY ARE NOT
NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS OF THE LIMITED PARTNERSHIP AGREEMENT. The Partnership maintains
books for the purpose of registering transfers. This Certificate has not been
and will not be registered under the Securities Act of 1933 or under the
securities or blue sky laws of any state. The holder of this Certificate, by its
acceptance hereof, represents that it is acquiring this security for investment
and not with a view to any sale or distribution hereof."

          This provision shall not be amended, and any purported amendment to
this provision, shall be null and void.


                                        4



                                   ARTICLE 2.
                                   DEFINITIONS

          The following capitalized words and phrases used in this Agreement
shall have the following meanings:

     2.1 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

           2.1.1 Add to such Capital Account the following items:

          (a)  The amount, if any, that such Partner is obligated to contribute
               to the Partnership upon liquidation of such Partner's Interest;
               and

          (b)  The amount that such Partner is obligated to restore or is deemed
               to be obligated to restore pursuant to the penultimate sentence
               of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
               and

          2.1.2 Subtract from such Capital Account, such Partner's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          2.1.3 The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     2.2 "AGREEMENT" means this Limited Partnership Agreement, as amended from
time to time.

     2.3 "CAPITAL ACCOUNT" means the Capital Account maintained for each Partner
in accordance with the following provisions:

          2.3.1 To each Partner's Capital Account there shall be added (a) such
Partner's Capital Contributions, (b) such Partner's allocable share of Net
Profits and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Article 4 hereof and (c) the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

          2.3.2 From each Partner's Capital Account there shall be subtracted
(a) the amount of (i) cash and (ii) the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of this
Agreement, (b) such Partner's allocable share of Net Losses and any other items
in the nature of expenses or losses that are specially allocated to such Partner
pursuant to Article 4 and (c) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership.

          2.3.3 In determining the amount of any liability for purposes of
Section 2.3.1 and Section 2.3.2, there shall be taken into account Code Section
752(c) and any other applicable provisions of the Code and the Regulations.


                                        5



          2.3.4 Additional adjustments shall be made to the Partners' Capital
Accounts as required by Regulations Sections 1.704-1(b) and 1.704-2 or, as
permitted but not required, in the discretion of the General Partner.
Adjustments to Capital Accounts in respect of Partnership income, gain, loss,
deduction and non-deductible expenditures (or any item thereof) shall be made
with reference to the federal tax treatment of such items (and, in the case of
book items, with reference to federal tax treatment of the corresponding tax
items) at the Partnership level, without regard to any requisite or elective tax
treatment of such items at the Partner level.

          2.3.5 The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any additions or subtractions thereto, are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Partner pursuant to Article 7 hereof upon the
dissolution of the Partnership. The General Partner shall also make (a) any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate
modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     2.4 "CAPITAL CONTRIBUTIONS" means, with respect to any Partner, the amount
of money and the Gross Asset Value of any property contributed to the capital of
the Partnership by such Partner, whether as an initial Capital Contribution or
as an additional Capital Contribution.

     2.5 "CASH AVAILABLE FOR DISTRIBUTION" means, with respect to any fiscal
year, all Partnership cash receipts (but excluding any proceeds from a
Terminating Capital Transaction), after deducting payments for operating cash
expenses and any other amounts set aside for the restoration, increase or
creation of Reserves. Notwithstanding the foregoing, Cash Available for
Distribution shall not include Financing Proceeds.

     2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

     2.7 "DEPRECIATION" means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.


                                        6



     2.8 "FINANCING PROCEEDS" means the net proceeds from any loan secured by
all or any portion of the Partnership's real property (including any
refinancing) that remain after the repayment of any indebtedness of the
Partnership secured by all or a portion of such real property with such proceeds
and all costs related to such loan.

     2.9 "GENERAL PARTNER" means West Side Campus of Care GP, LLC, a Delaware
limited liability company, and its permitted successors and assigns.

     2.10 "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          2.10.1 The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the General Partner and the Limited Partner.

          2.10.2 The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in subsection (a), subsection
(b), subsection (c) or subsection (d) hereof shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

          (a)  the acquisition of an additional interest in the Partnership by a
               new or existing Partner in exchange for more than a de minimis
               Capital Contribution, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (b)  the distribution by the Partnership to a Partner of more than a
               de minimis amount of Partnership property as consideration for an
               interest in the Partnership, if the General Partner reasonably
               determines that such adjustment is necessary or appropriate to
               reflect the relative economic interests of the Partners in the
               Partnership;

          (c)  the liquidation of the Partnership within the meaning of
               Regulations Section 1.704-1(b)(2)(ii)(g); and

          (d)  at such other times as the General Partner shall reasonably
               determine necessary or advisable in order to comply with
               Regulations Sections 1.704-1(b) and 1.704-2.

          2.10.3 The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner and the Limited Partner.

          2.10.4 The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-


                                        7



1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted
pursuant to this Section 2.10.4 to the extent that the General Partner
reasonably determines that an adjustment pursuant to subsection (b) of Section
2.10.2 above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section 2.10.4.

          2.10.5 If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to Section 2.10.1, Section 2.10.2 or Section
2.10.4 hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

     2.11 "INTEREST" means the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with all of
the terms and provisions of this Agreement, which Interest shall be evidenced by
a Partnership Certificate.

     2.12 "LIMITED PARTNER" means Summit Care Corporation, a California
corporation, and its permitted successors and assigns.

     2.13 "NET PROFITS" OR "NET LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          2.13.1 Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this Section 2.12 shall be added to such taxable income or
loss;

          2.13.2 Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section 2.12, shall be
subtracted from such taxable income or loss;

          2.13.3 Gain or loss resulting from any disposition of Partnership
Property where such gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Partnership
Property disposed of, notwithstanding that the adjusted tax basis of such
Partnership Property differs from its Gross Asset Value;

          2.13.4 If the Gross Asset Value of any Partnership asset is adjusted
in accordance with the terms of this Agreement, the amount of such adjustment
shall be taken into account in the taxable year of such adjustment as gain or
loss from the disposition of such asset for purposes of computing Net Profits or
Net Losses;

          2.13.5 Notwithstanding any other provision of this Section 2.12, any
items that are specially allocated pursuant to Section 4.4 hereof shall not be
taken into account in computing Net Profits or Net Losses.


                                        8



     2.14 "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

     2.15 "NONRECOURSE LIABILITY" has the meaning set forth in Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).

     2.16 "PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i).

     2.17 "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

     2.18 "PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).

     2.19 "PARTNERS" means the General Partner and the Limited Partner.

     2.20 "PARTNERSHIP" means the Delaware limited partnership governed by this
Agreement.

     2.21 "PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1).

     2.22 "PARTNERSHIP PROPERTY" means all direct and indirect interests in real
and personal property owned by the Partnership from time to time and shall
include both tangible and intangible property (including cash).

     2.23 "PERCENTAGE INTEREST" means with respect to each Partner, the
percentage of outstanding Interests held by such Partner as evidenced by a
Partnership Certificate, which percentage shall be set forth opposite such
Partner's name on Exhibit A attached hereto as it may be amended or supplemented
from time to time.

     2.24 "PERSON" means any individual, corporation, partnership, joint
venture, limited liability partnership, limited liability company, association,
joint stock company, trust, unincorporated organization, whether or not a legal
entity or other business or governmental entity.

     2.25 "RECOURSE LIABILITY" has the meaning set forth in Regulations Section
1.752-1(a)(1).

     2.26 "REGULATIONS" means proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

     2.27 "RESERVES" means, with respect to any fiscal year or other period,
funds set aside or amounts allocated during such period to reserves that shall
be maintained in amounts deemed


                                        9



sufficient by the General Partner for working capital, to pay taxes, insurance,
debt service, and other costs or expenses incident to the ownership of the
Partnership Property and the conduct of business by the Partnership as
contemplated hereunder.

     2.28 "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

     2.29 "TRANSFER" means a sale, conveyance, exchange, assignment, pledge,
encumbrance, making a gift of, hypothecation or other transfer, or an agreement
to do any of the foregoing.

                                   ARTICLE 3.
                     CAPITAL; CAPITAL ACCOUNTS AND PARTNERS

     3.1 INITIAL CAPITAL CONTRIBUTIONS OF THE PARTNERS. The Partners have made
or been credited with the Capital Contributions to the Partnership reflected in
the Capital Account established for each Partner.

     3.2 ADDITIONAL CAPITAL CONTRIBUTIONS BY THE PARTNERS. Neither of the
Partners shall be required to and no Partner has the right to make any
additional Capital Contributions to the Partnership, except that the Partners
shall make such additional Capital Contributions as provided below in this
Section 3.2.

          3.2.1 If the General Partner determines, at any time and from time to
time, that the Partnership requires additional capital for its business and
operations, the General Partner, in its sole and absolute discretion, may
deliver notice (an "Additional Capital Requirement Notice") to the Limited
Partner specifying the additional amount of capital so determined to be
required; provided, however, the General Partner shall have no obligation to any
creditor of the Partnership to deliver an Additional Capital Requirement Notice.
At any time after the delivery to the Limited Partner of such an Additional
Capital Requirement Notice, the Partners, in proportion to their Percentage
Interests, shall make an additional Capital Contribution to the Partnership up
to the amount stated in such notice.

          3.2.2 Notwithstanding anything to the contrary in this Agreement, with
respect to any future Capital Contributions, the actual making of such Capital
Contributions by the Partners in proportion to their Percentage Interests shall
be deemed to have been made pursuant to an Additional Capital Requirement
Notice, whether written or oral.

     3.3 CAPITAL ACCOUNTS. A Capital Account shall be established and maintained
for each Partner in accordance with the terms of this Agreement.

     3.4 OTHER MATTERS.

          3.4.1 Except as otherwise provided in this Agreement, a Partner shall
not demand or be entitled to receive a return of or interest on its Capital
Contributions or Capital Account, withdraw any portion of its Capital
Contributions or receive any distributions from the


                                       10



Partnership as a return of capital on account of such Capital Contributions
without, in each instance, the approval of both Partners. Under circumstances
requiring or permitting a return of its Capital Contributions, the Partners
shall have the right to receive property other than cash as reasonably
determined by the General Partner, except as may be specifically prohibited
herein.

          3.4.2 Except as otherwise provided by the Act, neither the General
Partner nor the Limited Partner shall be liable for the debts, liabilities,
contracts or any other obligations of the Partnership, nor shall the General
Partner or the Limited Partner be required to lend any funds to the Partnership.

                                   ARTICLE 4.
                          ALLOCATIONS AND DISTRIBUTIONS

     4.1 DISTRIBUTIONS IN GENERAL. Except as otherwise provided in Article 7
hereof and subject to Sections 17-607 and 17-804 of the Act, for any fiscal year
all Cash Available for Distribution, net proceeds from any Terminating Capital
Transaction and Financing Proceeds shall be distributed to the Partners at least
quarterly.

     4.2 DISTRIBUTIONS OF CASH AVAILABLE FOR DISTRIBUTION AND NET PROCEEDS FROM
TERMINATING CAPITAL TRANSACTIONS.

          4.2.1 Subject to Article 7 hereof, any Cash Available for Distribution
shall be distributed to the Partners in proportion to their Percentage
Interests.

          4.2.2 Any net proceeds of a Terminating Capital Transaction shall be
applied or distributed as provided in Section 7.3(c) hereof.

          4.2.3 All amounts withheld pursuant to the Code or any provision of
any state or local tax law with respect to any payment or distribution to the
Partnership or the Partners shall be treated as amounts distributed to the
Partners pursuant to this Article 4 and Article 7 hereof for all purposes under
this Agreement.

     4.3 ALLOCATION OF NET PROFITS AND LOSSES. Subject to Section 4.4, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any fiscal year shall be allocated, for purposes of adjusting the Capital
Accounts of the Partners, in proportion to the Partners' Percentage Interests.

     4.4 ADDITIONAL SPECIAL ALLOCATIONS. Notwithstanding the foregoing
provisions of this Article 4:

          4.4.1 Tax items with respect to Partnership Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated between the Partners for income tax purposes
pursuant to Regulations promulgated under Code Section 704(c) so as to take into
account such variation. The Partnership shall account for such variation under
any method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). If the Gross Asset Value
of any Partnership asset is adjusted


                                       11



pursuant to Section 2.10.2, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Gross
Asset Value in the same manner as under Code Section 704(c) and the Regulations
promulgated thereunder. Allocations pursuant to this Section 4.4.1 are solely
for purposes of federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital Account or share
of Net Profits, Net Losses and any other items or distributions pursuant to any
provision of this Agreement.

          4.4.2 The Nonrecourse Deductions for each taxable year of the
Partnership shall be allocated to the Partners in proportion to their Percentage
Interests.

          4.4.3 If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner shall be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner's share of the net decrease
in Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g)(2). This Section 4.4.3 is intended to comply with the minimum gain
chargeback requirement of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. The allocation otherwise required pursuant
to this Section 4.4.3 shall, however, not apply to a Partner to the extent that
the minimum gain chargeback rules are inapplicable in a particular circumstance.

          4.4.4 The Partner Nonrecourse Deductions shall be allocated each year
to the Partner that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.

          4.4.5 If there is a net decrease in Partner Minimum Gain attributable
to a Partner Nonrecourse Debt during any Partnership taxable year, each Partner
who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such taxable year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). This Section 4.4.5 is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

          4.4.6 If any Partner unexpectedly receives an adjustment, allocation
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes an Adjusted Capital Account
Deficit in such Partner's capital account, items of income and gain shall be
allocated to all such Partners (in proportion to the amounts of their respective
Adjusted Capital Account Deficits) in an amount and manner sufficient to
eliminate the deficit balances in such Partners' Capital Accounts, that are in
excess of such Partners' respective Adjusted Capital Account Deficits, as
quickly as possible as of the end of the Partnership's taxable year to which
adjustment, allocation or distribution relates. It is intended that this Section
4.4.6 qualify and be construed as a "qualified income offset" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(d).


                                       12



          4.4.7 In the event that any Partner has a deficit Capital Account at
the end of any fiscal year that is in excess of the sum of (1) the amount (if
any) that such Partner is obligated to restore to the Partnership upon
liquidation of such Partner's Partnership Interest and (2) the amount such
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.7 shall be made if and only to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 4 have been tentatively made as if
this Section 4.4.7 and Section 4.4.6 hereof were not in the Agreement.

          4.4.8 If the allocation of Net Loss to a Partner as provided in
Section 4.3 hereof would create or increase an Adjusted Capital Account Deficit,
there shall be allocated to such Partner only that amount of Net Loss as will
not create or increase an Adjusted Capital Account Deficit. The Net Loss that
would, absent the application of the preceding sentence, otherwise be allocated
to such Partner shall be allocated to the other Partners pro rata to the
allocation of other Losses to such Partner, subject to the limitations set forth
in this Section 4.4.8.

          4.4.9 To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
his Interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          4.4.10 The allocations set forth in Sections 4.4.2, 4.4.3, 4.4.4,
4.4.5, 4.4.6, 4.4.7, 4.4.8 and 4.4.9 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of Regulations Sections 1.704-1(b)
and 1.704-2(i). The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to distribute the cash of the Partnership or
allocate Partnership income or loss. Accordingly, the General Partner is hereby
authorized to allocate Net Profits, Net Losses, and other items of income,
gains, loss and deductions to the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions will
be divided between the Partners. In general, the Partners anticipate that this
will be accomplished by specially allocating other Net Profits, Net Losses and
other items of income, gain, loss and deduction to the Partners so that, to the
extent possible, the net amount of such allocations of other Net Profits, Net
Losses and other items and the Regulatory Allocations to the Partners shall be
equal to the net amount that would have been allocated among the Partners if the
Regulatory Allocations had not occurred. However, the General Partner shall have
discretion to accomplish this result in any reasonable manner.

          4.4.11 Except as otherwise required by Sections 4.4.1 through 4.4.9
hereof, but notwithstanding the other foregoing provisions of this Article 4, at
all times during the existence


                                       13



of the Partnership the General Partner's interest in each item of Partnership
income, gain, loss, deduction or credit shall equal at least one percent (1%) of
each of those items.

          4.4.12 For purposes of determining the Net Profits, Net Losses and any
other items of income, gain, loss and deduction allocable to any period, Net
Profits, Net Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder.

                                   ARTICLE 5.
                                   OPERATIONS

     5.1 MANAGEMENT. The business and affairs of the Partnership shall be
managed exclusively by the General Partner. The General Partner shall have full
and complete charge of all the affairs and business of the Partnership, in all
respects and in all matters, including (without limitation) the responsibility,
authority and power, on behalf of the Partnership, at Partnership expense and
without the approval of the Limited Partner, to:

          (a)  pay, collect, compromise, arbitrate or otherwise adjust any and
               all claims or demands of or against the Partnership, in such
               amounts and upon such terms and conditions as the General Partner
               shall reasonably determine;

          (b)  from time to time, employ, engage, hire or otherwise secure the
               services of such Persons, including any of the parties hereto or
               any Persons, firms or corporations related thereto or affiliated
               therewith, as the General Partner may reasonably deem advisable
               for the proper execution of its duties as General Partner
               hereunder, provided such services are within the scope of the
               foregoing authority granted to the General Partner hereunder,
               such employment to be for such reasonable compensation and upon
               such reasonable terms and conditions as the General Partner shall
               determine;

          (c)  prepare, execute, file, record, publish and deliver any and all
               instruments, documents or statements necessary or convenient to
               effectuate any and all actions that the General Partner is
               authorized to take on behalf of the Partnership.

          (d)  borrow money and issue evidences of indebtedness necessary,
               convenient or incidental to the accomplishment of the purposes of
               the Partnership, and secure the same by mortgage, pledge or other
               lien on any Partnership assets;

          (e)  deal with, or otherwise engage in business with, or provide
               services to and receive compensation therefor from, any Person
               who has provided or may in the future provide services to, lend
               money to, sell property to or purchase property from the Partners
               or any affiliate of the Partners;

          (f)  establish and maintain Reserves for such purposes and in such
               amounts as it deems appropriate from time to time; and


                                       14



          (g)  engage in any kind of activity and perform and carry out
               contracts of any kind necessary to, in connection with or
               incidental to the accomplishment of the purposes of the
               Partnership, as may be lawfully carried on or performed by a
               limited partnership under the laws of the State of Delaware.

          5.1.2 Except as expressly provided in this Agreement, the Limited
Partner shall have no right to vote on or consent to any other matter, act,
decision or document involving the Partnership or its business, including any
vote provided for in the Act.

     5.2 REIMBURSEMENT. Subject to Article 8 hereof, the General Partner shall
be entitled to reimbursement from the Partnership for all costs and expenses
(including allocable overhead) incurred by it for or on behalf of the
Partnership.

     5.3 REPORTS.

          5.3.1 The General Partner shall cause to be kept, at the principal
place of business of the Partnership, or at such other location as the General
Partner shall reasonably deem appropriate or advisable, full and proper ledgers
and other books of account of all receipts and disbursements and other financial
activities of the Partnership.

          5.3.2 The Limited Partner (personally or through its authorized
representative) shall have the right to examine and copy the books and records
of the Partnership at all reasonable times.

     5.4 INDEMNIFICATION OF GENERAL PARTNER; LIABILITY OF GENERAL PARTNER.

          5.4.1 Other than with respect to an action by, on behalf of, or in the
right of the Partnership, the Partnership shall indemnify and hold harmless the
General Partner, its parents, affiliates and subsidiaries, and all officers,
directors, employees and agents of any of the foregoing (individually, an
"Indemnitee") to the full extent permitted by law from and against any and all
losses, claims, demands, costs, damages, liabilities, joint and several,
expenses of any nature (including attorneys' fees and disbursements), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
in which the Indemnitee may be involved, or threatened to be involved as a party
or otherwise, arising out of or incident to the business of the Partnership, if
(i) the Indemnitee acted in good faith and in a manner it believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross negligence
or willful misconduct. The termination of an action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendre or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified in clauses (i) or (ii) above.

          5.4.2 Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 5.4 shall be advanced
by the Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the


                                       15



Partnership of a written commitment by or on behalf of the Indemnitee to repay
such amount if it shall be determined that such Indemnitee is not entitled to be
indemnified as authorized in this Section 5.4.

          5.4.3 The indemnification provided by this Section 5.4 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to a vote of the Partners, as a matter of law or equity or
otherwise, and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

          5.4.4 Any indemnification provided hereunder shall be satisfied solely
out of the assets of the Partnership. Neither the General Partner nor the
Limited Partner shall be subject to personal liability by reason of these
indemnification provisions.

          5.4.5 No Indemnitee shall be denied indemnification in whole or in
part under this Section 5.4 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.

          5.4.6 The provisions of this Section 5.4 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Person.

          5.4.7 Neither the General Partner nor its parents, subsidiaries or
affiliates nor the officers, directors, employees of any of the foregoing shall
be liable to the Partnership or to the Limited Partner for any losses sustained
or liabilities incurred as a result of any act or omission of the General
Partner or any such other Person if (i) the General Partner or such other Person
acted (or failed to act) in good faith and in a manner it believed to be in, or
not opposed to, the interests of the Partnership, and (ii) the conduct of the
General Partner or such other Person did not constitute gross negligence or
willful misconduct.

                                   ARTICLE 6.
                                    TRANSFERS

     6.1 TRANSFERS AND ASSIGNMENTS. Subject to this Section 6.1, a Partner may
transfer or assign all but not less than all of its Interest. If a Partner
transfers or assigns all of its Interest pursuant to this Section 6.1, the
transferee shall be admitted as a Partner of the Partnership upon its execution
of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Partner shall cease to be a Partner of the Partnership. Any successor to a
Partner by merger or consolidation shall, without further act, be a Partner
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Partnership shall continue without
dissolution.

                                   ARTICLE 7.
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

     7.1 LIMITATIONS. The Partnership may be dissolved, liquidated and
terminated pursuant to and only pursuant to the provisions of this Article 7,
and the parties hereto do hereby


                                       16



irrevocably waive any and all other rights they may have to cause a dissolution
of the Partnership or a sale or partition of any or all of the Partnership's
assets.

     7.2 EXCLUSIVE CAUSES. The following and only the following events shall
cause the Partnership to be dissolved, liquidated and terminated:

          (a)  The unanimous election of the Partners;

          (b)  The occurrence of an event of withdrawal of the General Partner;
               provided, however, the events set forth at Sections 17-402(a)(4)
               and (5) of the Act shall not constitute events of withdrawal of
               the General Partner and upon the occurrence of any such event the
               General Partner shall not cease to be general partner of the
               Partnership and the Partnership shall continue without
               dissolution; and

          (c)  Dissolution of the Partnership by law, including pursuant to a
               decree of judicial dissolution under Section 17-802 of the Act.

     7.3 LIQUIDATION. In all cases of dissolution of the Partnership, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the
Partnership pursuant to the provisions of this Section 7.3, and, as promptly as
practicable, each of the following shall be accomplished:

          (a)  The Partnership Property shall be liquidated in an orderly,
               businesslike and commercially reasonable manner.

          (b)  Any Net Profit, Net Loss or other item of income, gain, loss or
               deduction realized by the Partnership upon the sale of the
               Partnership Property or transfer in kind shall be deemed
               recognized and allocated to the Partners in the manner set forth
               in Article 4 hereof.

          (c)  The proceeds of sale of Partnership assets and all other assets
               of the Partnership shall first be applied to satisfaction of all
               Partnership debts in accordance with the Act and to the
               establishment of any necessary Reserves, and then shall be
               distributed to the Partners in proportion to and to the extent of
               positive balances in their respective Capital Accounts.

     7.4 NO CAPITAL CONTRIBUTION UPON DISSOLUTION. Each Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership, its Capital Contribution thereto, its Capital Account, its
share of Net Profits or Net Losses or other items and shall have no recourse
therefor (upon dissolution or otherwise) against any Partner. No Partner shall
be obligated to restore to the Partnership any negative balance that may exist
or continue in such Partner's Capital Account.

     7.5 NOTICE OF DISSOLUTION. In the event that an event described in Section
7.2 occurs, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Limited Partner and to all other
parties with whom the Partnership regularly conducts business (as determined in
the discretion of the General Partner).


                                       17



                                   ARTICLE 8.
                                  MISCELLANEOUS

     8.1 ACCOUNTING AND FISCAL YEAR. Subject to Code Section 448, the books of
the Partnership shall be kept on such method of accounting for tax and financial
reporting purposes as may be determined by the General Partner. The fiscal year
of the Partnership shall end on December 31 of each year, or on such other date
permitted under the Code as the General Partner shall determine.

     8.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     8.3 FURTHER ASSURANCES. Each of the parties hereto does hereby covenant and
agree on behalf of itself, its successors and its assigns, without further
consideration, to prepare, execute, acknowledge, file, record, publish and
deliver such other instruments, documents and statements, and to take such other
action as may be required by law or necessary to effectively carry out the
purposes of this Agreement.

     8.4 NOTICES. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the
Person to whom the same is directed, or sent by registered or certified mail,
return receipt requested, addressed as follows: if to the Partnership, to the
Partnership at the address set forth in Section 1.3 hereof, or to such other
address as the Partnership may from time to time specify by notice to the
Partners; if to a Partner, to such Partner at the address set forth in Exhibit
A, or to such other address as such Partner may from time to time specify by
notice to the Partnership. Any such notice shall be deemed to be delivered,
given and received for all purposes as of the date so delivered, if delivered
personally, or if sent by registered or certified mail, postage and charges
prepaid and properly addressed, on the date of receipt or refusal indicated on
the return receipt.

     8.5 ATTORNEYS' FEES. In the event that any action or proceeding be filed by
any Partner or by the Partnership as against the Partnership or any other
Partner to enforce any of the covenants or conditions hereof, the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
said judgment be entered.

     8.6 GOVERNING LAW. This Agreement, including its existence, validity,
construction and operating effect, and the rights of each of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (without regard to principles of conflicts of laws).

     8.7 AMENDMENTS. No amendments to this Agreement shall be effective without
the prior written approval of all of the Partners, which approval may be given
or withheld in the sole and absolute discretion of a Partner.


                                       18



     8.8 COUNTERPARTS. This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     8.9 FACSIMILE SIGNATURES. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       19



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

                                        "GENERAL PARTNER"

                                        West Side Campus of Care GP, LLC
                                        a Delaware limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                        "LIMITED PARTNER"

                                        Summit Care Corporation.,
                                        a California corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp,
                                            Secretary


                                       S-1



                                    EXHIBIT A

                        PARTNERS AND PERCENTAGE INTERESTS



NAME AND ADDRESS OF PARTNERS       PERCENTAGE INTEREST
- ----------------------------       -------------------
                                
Summit Care Corporation                    99%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610

West Side Campus of Care GP, LLC            1%
27442 Portola Parkway, Suite 200
Foothill Ranch, CA 92610


                                    EXHIBIT A

EX-3.217

                                                                   Exhibit 3.217

                            CERTIFICATE OF FORMATION

                                       OF

             CARMEL HILLS HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Carmel Hills Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

             CARMEL HILLS HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.218

                                                                   Exhibit 3.218

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
             CARMEL HILLS HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Carmel Hills Healthcare and Rehabilitation
Center, LLC (the "LLC"), is entered into by Summit Care Corporation, as the sole
equity member (the "Member"), effective as of January 13, 2006 (the "Effective
Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Carmel Hills Healthcare and
Rehabilitation Center, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities:

     (a) managing and operating the health care facility located on the real
property described on Exhibit A attached hereto and incorporated herein by this
reference, including leasing such real property (the "Facility Operations"); and

     (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

     (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

     (b) the initial Managers shall be as set forth on Exhibit B attached hereto
and incorporated herein by this reference;


                                       1



     (c) all actions of the Board of Managers shall require a majority vote of
the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

     (d) the Board of Managers shall meet at such times as may be necessary for
the business of the LLC upon at least five business days' prior written notice
of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

     (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

     (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

     (g) the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address

     Summit Care Corporation
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Carmel Hills
     Healthcare and Rehabilitation Center, LLC and shall be a security governed
     by Article 8 of the Uniform Commercial Code as in effect in the State of
     Delaware and, to the extent permitted by applicable law, Article 8 of the
     Uniform Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.


                                       2



Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

     (a)  be comprised minimally of a President, Chief Financial Officer, Vice
          President, and Secretary;

     (b)  be selected by the Member;

     (c)  be allowed to serve on the Board of Managers;

     (d)  serve so long as the Member desires or until their resignation, death
          or incapacitation; and

     (e)  meet at such times as may be necessary for the business of the LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

     Jose Lynch      Chief Executive Officer and President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer and Treasurer

     Roland Rapp     Chief Administrative Officer and Secretary

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Senior Vice President of Operations. The Senior Vice President of
Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

Section 5.06 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

     (a) record all the actions taken by the Member, Officers and the Board of
Managers in a book to be kept for that purpose;

     (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

     (c) be custodian of the records; and

     (d) see that all of the books, reports, statements, certificates and all
other documents and records required to be kept by statute or this Agreement are
properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs


                                       3



of investigation and appeal) suffered or incurred by any such Indemnitee by
reason of, or arising from, the operations, business, or affairs of, or any
action taken or failure to act on behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

     (a) Assignments. The Member may, with prior written notice to the LLC and
in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

     (b) Resignation. If the Member resigns pursuant to this Section 7.01(b), an
additional member of the LLC may be admitted to the LLC, subject to Sections
7.01(c), upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the LLC.

     (c) Admission of Additional Members. One or more additional members of the
LLC may be admitted to the LLC with the written consent of the Member.

     (d) Dissolution. The LLC shall be dissolved, and its affairs shall be wound
up upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the LLC or the occurrence of any other
event which terminates the continued membership of the last remaining member of
the LLC in the LLC unless the LLC is continued without dissolution in a manner
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       4



     IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                             DESCRIPTION OF PROPERTY



PROPERTY NAME                 ADDRESS
- -------------                 -------
                           
Carmel Hills Healthcare and   810 East Walnut
Rehabilitation Center, LLC    Independence, Missouri 64050



                                       A-1



                                    EXHIBIT B
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.219

                                                                   Exhibit 3.219

                            CERTIFICATE OF FORMATION

                                       OF

                            EAST WALNUT PROPERTY, LLC

     This Certificate of Formation of East Walnut Property, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                            EAST WALNUT PROPERTY, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.220

                                                                   Exhibit 3.220

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            EAST WALNUT PROPERTY, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of East Walnut Property, LLC (the "LLC"), is
entered into by Summit Care Corporation, as the sole equity member (the
"Member"), effective as of January 13, 2006 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is East Walnut Property, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities: engaging in any lawful act or activity and
exercising any powers permitted to limited liability companies organized under
the laws of the State of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit A attached
hereto and incorporated herein by this reference;

          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar


                                        1



communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address
          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

          "This certificate evidences a membership interest in East Walnut
          Property, LLC and shall be a security governed by Article 8 of the
          Uniform Commercial Code as in effect in the State of Delaware and, to
          the extent permitted by applicable law, Article 8 of the Uniform
          Commercial Code of each other applicable jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.


                                        2



                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

          (a)  be comprised minimally of a President, Chief Financial Officer,
               and Secretary;

          (b)  be selected by the Member;

          (c)  be allowed to serve on the Board of Managers;

          (d)  serve so long as the Member desires or until their resignation,
               death or incapacitation; and

          (e)  meet at such times as may be necessary for the business of the
               LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

          Jose Lynch    Chief Executive Officer and President

          Roland Rapp   Chief Administrative Officer and Secretary

          John King     Chief Financial Officer and Treasurer

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs of investigation and appeal) suffered or
incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such


                                       3



admission, the transferor Member  shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        4



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       A-1

EX-3.221

                                                                   Exhibit 3.221

                            CERTIFICATE OF FORMATION

                                       OF

                           GLEN HENDREN PROPERTY, LLC

     This Certificate of Formation of Glen Hendren Property, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                           GLEN HENDREN PROPERTY, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.222

                                                                   Exhibit 3.222

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                           GLEN HENDREN PROPERTY, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Glen Hendren Property, LLC (the "LLC"), is
entered into by Summit Care Corporation, as the sole equity member (the
"Member"), effective as of January 13, 2006 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Glen Hendren Property, LLC (the
"LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities: engaging in any lawful act or activity and
exercising any powers permitted to limited liability companies organized under
the laws of the State of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

     (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

     (b) the initial Managers shall be as set forth on Exhibit A attached hereto
and incorporated herein by this reference;

     (c) all actions of the Board of Managers shall require a majority vote of
the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

     (d) the Board of Managers shall meet at such times as may be necessary for
the business of the LLC upon at least five business days' prior written notice
of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar


                                        1



communications system, and actions of the Board of Managers may be by written
consent (in which case, no notice shall be required), which written consents,
except as otherwise expressly required in this Agreement, shall be effective if
signed in one or more counterparts by a majority of the Managers. The presence
of two Managers, in person or by proxy, shall constitute a quorum. Each Manager
has the right to one vote. Each Manager not only has the right to his own vote,
but may vote by proxy for one other Manager;

     (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

     (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

     (g) the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address
     Summit Care Corporation
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Glen Hendren Property,
     LLC and shall be a security governed by Article 8 of the Uniform Commercial
     Code as in effect in the State of Delaware and, to the extent permitted by
     applicable law, Article 8 of the Uniform Commercial Code of each other
     applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.


                                        2



                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

     (a)  be comprised minimally of a President, Chief Financial Officer, and
          Secretary;

     (b)  be selected by the Member;

     (c)  be allowed to serve on the Board of Managers;

     (d)  serve so long as the Member desires or until their resignation, death
          or incapacitation; and

     (e)  meet at such times as may be necessary for the business of the LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

   Jose Lynch    Chief Executive Officer and President

   Roland Rapp   Chief Administrative Officer and Secretary

   John King     Chief Financial Officer and Treasurer

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

     (a) record all the actions taken by the Member, Officers and the Board of
Managers in a book to be kept for that purpose;

     (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

     (c) be custodian of the records; and

     (d) see that all of the books, reports, statements, certificates and all
other documents and records required to be kept by statute or this Agreement are
properly filed and kept.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs of investigation and appeal) suffered or
incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

     (a) Assignments. The Member may, with prior written notice to the LLC and
in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such


                                        3



admission, the transferor Member shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

     (b) Resignation. If the Member resigns pursuant to this Section 7.01(b), an
additional member of the LLC may be admitted to the LLC, subject to Sections
7.01(c), upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the LLC.

     (c) Admission of Additional Members. One or more additional members of the
LLC may be admitted to the LLC with the written consent of the Member.

     (d) Dissolution. The LLC shall be dissolved, and its affairs shall be wound
up upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the LLC or the occurrence of any other
event which terminates the continued membership of the last remaining member of
the LLC in the LLC unless the LLC is continued without dissolution in a manner
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        4



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       A-1

EX-3.223

                                                                   Exhibit 3.223

                            CERTIFICATE OF FORMATION

                                       OF

              HOLMESDALE HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Holmesdale Healthcare and Rehabilitation
Center, LLC is being duly executed and filed by an authorized person to form a
limited liability company under the Delaware Limited Liability Company Act (6
Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

              HOLMESDALE HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.224

                                                                   Exhibit 3.224

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
              HOLMESDALE HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Holmesdale Healthcare and Rehabilitation
Center, LLC (the "LLC"), is entered into by Summit Care Corporation, as the sole
equity member (the "Member"), effective as of January 13, 2006 (the "Effective
Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Holmesdale Healthcare and
Rehabilitation Center, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;


                                        1



          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

          Name and Address

          Summit Care Corporation
          27442 Portola Parkway, Suite 200
          Foothill Ranch, California 92610
          Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Holmesdale
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.


                                        2



Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

          (a)  be comprised minimally of a President, Chief Financial Officer,
               Vice President, and Secretary;

          (b)  be selected by the Member;

          (c)  be allowed to serve on the Board of Managers;

          (d)  serve so long as the Member desires or until their resignation,
               death or incapacitation; and

          (e)  meet at such times as may be necessary for the business of the
               LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

          Jose Lynch      Chief Executive Officer and President

          Eddie Parades   Senior Vice President of Operations

          John King       Chief Financial Officer and Treasurer

          Roland Rapp     Chief Administrative Officer and Secretary

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Senior Vice President of Operations. The Senior Vice President of
Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

Section 5.06 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs


                                        3



of investigation and appeal) suffered or incurred by any such Indemnitee by
reason of, or arising from, the operations, business, or affairs of, or any
action taken or failure to act on behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       4



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                          ADDRESS
- -------------                                          -------
                                                    
Holmesdale Healthcare and Rehabilitation Center, LLC   8033 Holmes Road
                                                       Kansas City, Missouri 64131



                                       A-1



                                    EXHIBIT B
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.225

                                                                   Exhibit 3.225

                            CERTIFICATE OF FORMATION

                                       OF

                            HOLMESDALE PROPERTY, LLC

     This Certificate of Formation of Holmesdale Property, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                            HOLMESDALE PROPERTY, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.226

                                                                   Exhibit 3.226

                  LIMITED LIABILITY COMPANY OPERATING AGREEMENT
                                       OF
                            HOLMESDALE PROPERTY, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Holmesdale Property, LLC (the "LLC"), is
entered into by Summit Care Corporation, as the sole equity member (the
"Member"), effective as of January 13, 2006 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Holmesdale Property, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities: engaging in any lawful act or activity and
exercising any powers permitted to limited liability companies organized under
the laws of the State of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

     (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

     (b) the initial Managers shall be as set forth on Exhibit A attached hereto
and incorporated herein by this reference;

     (c) all actions of the Board of Managers shall require a majority vote of
the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

     (d) the Board of Managers shall meet at such times as may be necessary for
the business of the LLC upon at least five business days' prior written notice
of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar


                                        1



communications system, and actions of the Board of Managers may be by written
consent (in which case, no notice shall be required), which written consents,
except as otherwise expressly required in this Agreement, shall be effective if
signed in one or more counterparts by a majority of the Managers. The presence
of two Managers, in person or by proxy, shall constitute a quorum. Each Manager
has the right to one vote. Each Manager not only has the right to his own vote,
but may vote by proxy for one other Manager;

     (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

     (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

     (g) the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address
     Summit Care Corporation
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Holmesdale Property,
     LLC and shall be a security governed by Article 8 of the Uniform Commercial
     Code as in effect in the State of Delaware and, to the extent permitted by
     applicable law, Article 8 of the Uniform Commercial Code of each other
     applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.


                                       2



                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

     (a) be comprised minimally of a President, Chief Financial Officer, and
Secretary;

     (b) be selected by the Member;

     (c) be allowed to serve on the Board of Managers;

     (d) serve so long as the Member desires or until their resignation, death
or incapacitation; and

     (e) meet at such times as may be necessary for the business of the LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

     Jose Lynch    Chief Executive Officer and President

     Roland Rapp   Chief Administrative Officer and Secretary

     John King     Chief Financial Officer and Treasurer

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

     (a) record all the actions taken by the Member, Officers and the Board of
Managers in a book to be kept for that purpose;

     (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

     (c) be custodian of the records; and

     (d) see that all of the books, reports, statements, certificates and all
other documents and records required to be kept by statute or this Agreement are
properly filed and kept.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs of investigation and appeal) suffered or
incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

     (a) Assignments. The Member may, with prior written notice to the LLC and
in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such


                                       3



admission, the transferor Member shall cease to be a member of the LLC. Any
successor to a Member by merger or consolidation shall, without further act, be
the Member hereunder, and such merger or consolidation shall not constitute an
assignment for purposes of this Agreement and the LLC shall continue without
dissolution.

     (b) Resignation. If the Member resigns pursuant to this Section 7.01(b), an
additional member of the LLC may be admitted to the LLC, subject to Sections
7.01(c), upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the LLC.

     (c) Admission of Additional Members. One or more additional members of the
LLC may be admitted to the LLC with the written consent of the Member.

     (d) Dissolution. The LLC shall be dissolved, and its affairs shall be wound
up upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the LLC or the occurrence of any other
event which terminates the continued membership of the last remaining member of
the LLC in the LLC unless the LLC is continued without dissolution in a manner
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       4



     IN WITNESS WHEREOF, the Member has executed this Agreement effective as of
the Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       A-1

EX-3.227

                                                                   Exhibit 3.227

                            CERTIFICATE OF FORMATION

                                       OF

            LIBERTY TERRACE HEALTHCARE AND REHABILITATION CENTER, LLC

     This Certificate of Formation of Liberty Terrace Healthcare and
Rehabilitation Center, LLC is being duly executed and filed by an authorized
person to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

     FIRST. The name of the limited liability company formed hereby is:

            LIBERTY TERRACE HEALTHCARE AND REHABILITATION CENTER, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of January 13, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.228

                                                                   Exhibit 3.228

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
            LIBERTY TERRACE HEALTHCARE AND REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Liberty Terrace Healthcare and
Rehabilitation Center, LLC (the "LLC"), is entered into by Summit Care
Corporation, as the sole equity member (the "Member"), effective as of January
13, 2006 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Liberty Terrace Healthcare and
Rehabilitation Center, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on January 13, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities:

          (a) managing and operating the health care facility located on the
real property described on Exhibit A attached hereto and incorporated herein by
this reference, including leasing such real property (the "Facility
Operations"); and

          (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

          (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

          (b) the initial Managers shall be as set forth on Exhibit B attached
hereto and incorporated herein by this reference;


                                        1



          (c) all actions of the Board of Managers shall require a majority vote
of the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

          (d) the Board of Managers shall meet at such times as may be necessary
for the business of the LLC upon at least five business days' prior written
notice of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

          (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

          (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

          (g) the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

         Name and Address

         Summit Care Corporation
         27442 Portola Parkway, Suite 200
         Foothill Ranch, California 92610
         Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

          "This certificate evidences a membership interest in Liberty Terrace
          Healthcare and Rehabilitation Center, LLC and shall be a security
          governed by Article 8 of the Uniform Commercial Code as in effect in
          the State of Delaware and, to the extent permitted by applicable law,
          Article 8 of the Uniform Commercial Code of each other applicable
          jurisdiction."

          "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
          NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
          TRANSFER RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The
          Limited Liability Company maintains books for the purpose of
          registering transfers. This Certificate has not been and will not be
          registered under the Securities Act of 1933 or under the securities or
          blue sky laws of any state. The holder of this Certificate, by its
          acceptance hereof, represents that it is acquiring this security for
          investment and not with a view to any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.


                                        2



Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

          (a)  be comprised minimally of a President, Chief Financial Officer,
               Vice President, and Secretary;

          (b)  be selected by the Member;

          (c)  be allowed to serve on the Board of Managers;

          (d)  serve so long as the Member desires or until their resignation,
               death or incapacitation; and

          (e)  meet at such times as may be necessary for the business of the
               LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

     Jose Lynch      Chief Executive Officer and President

     Eddie Parades   Senior Vice President of Operations

     John King       Chief Financial Officer and Treasurer

     Roland Rapp     Chief Administrative Officer and Secretary

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Senior Vice President of Operations. The Senior Vice President of
Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

Section 5.06 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

          (a) record all the actions taken by the Member, Officers and the Board
of Managers in a book to be kept for that purpose;

          (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

          (c) be custodian of the records; and

          (d) see that all of the books, reports, statements, certificates and
all other documents and records required to be kept by statute or this Agreement
are properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs


                                        3



of investigation and appeal) suffered or incurred by any such Indemnitee by
reason of, or arising from, the operations, business, or affairs of, or any
action taken or failure to act on behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

          (a) Assignments. The Member may, with prior written notice to the LLC
and in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

          (b) Resignation. If the Member resigns pursuant to this Section
7.01(b), an additional member of the LLC may be admitted to the LLC, subject to
Sections 7.01(c), upon its execution of an instrument signifying its agreement
to be bound by the terms and conditions of this Agreement, which instrument may
be a counterpart signature page to this Agreement. Such admission shall be
deemed effective immediately prior to the resignation and, immediately following
such admission, the resigning Member shall cease to be a member of the LLC.

          (c) Admission of Additional Members. One or more additional members of
the LLC may be admitted to the LLC with the written consent of the Member.

          (d) Dissolution. The LLC shall be dissolved, and its affairs shall be
wound up upon the first to occur of the following: (i) the termination of the
legal existence of the last remaining member of the LLC or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the LLC in the LLC unless the LLC is continued without dissolution in
a manner permitted by this Agreement or the Act or (ii) the entry of a decree of
judicial dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        4



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                             DESCRIPTION OF PROPERTY



PROPERTY NAME                                               ADDRESS
- -------------                                               -------
                                                         
Liberty Terrace Healthcare and Rehabilitation Center, LLC   2201 Glenn Hendren Drive
                                                            Liberty, Missouri 64068



                                       A-1



                                    EXHIBIT B
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-3.229

                                                                   Exhibit 3.229

                            CERTIFICATE OF FORMATION

                                       OF

                              PREFERRED DESIGN, LLC

     This Certificate of Formation of Preferred Design, LLC is being duly
executed and filed by an authorized person to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del.C. Section 18-101, et.
seq.).

     FIRST. The name of the limited liability company formed hereby is:

                              PREFERRED DESIGN, LLC

     SECOND. The address of the registered office and the name and the address
of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

               NATIONAL REGISTERED AGENTS, INC.
               160 GREENTREE DRIVE, SUITE 101
               DOVER, KENT COUNTY, DELAWARE, 19904

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of February 22, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.230

                                                                  Exhibit 3.230

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
           PREFERRED DESIGN, LLC A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of Preferred Design, LLC (the "LLC"), is
entered into by Skilled Healthcare, LLC, as the sole equity member (the
"Member"), effective as of February 22, 2006 (the "Effective Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is Preferred Design, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on February 22, 2006, as the same may be amended, restated or
supplemented from time to time. Upon the filing of the Certificate of Formation
with the Secretary of State of the State of Delaware, her powers as an
"authorized person" ceased, and the Member thereupon became the designated
"authorized person" and shall continue as the designated "authorized person"
within the meaning of the Act. The Member or an Officer shall execute, deliver
and file any other certificates (and any amendments, supplements and/or
restatements thereof) necessary for the LLC to qualify to do business in the
state of California and in any jurisdiction in which the LLC may wish to conduct
business. The existence of the LLC as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in any lawful act or activity and exercising any powers permitted to
limited liability companies organized under the laws of the State of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

     (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

     (b) the initial Managers shall be as set forth on Exhibit B attached hereto
and incorporated herein by this reference;


                                        1



     (c) all actions of the Board of Managers shall require a majority vote of
the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

     (d) the Board of Managers shall meet at such times as may be necessary for
the business of the LLC upon at least five business days' prior written notice
of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

     (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

     (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

     (g) the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address

     Skilled Healthcare, LLC
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in Preferred Design, LLC
     and shall be a security governed by Article 8 of the Uniform Commercial
     Code as in effect in the State of Delaware and, to the extent permitted by
     applicable law, Article 8 of the Uniform Commercial Code of each other
     applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.


                                        2



Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.

Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

     (a) be comprised minimally of a President, Chief Financial Officer, Vice
President, and Secretary;

     (b) be selected by the Member;

     (c) be allowed to serve on the Board of Managers;

     (d) serve so long as the Member desires or until their resignation, death
or incapacitation; and

     (e) meet at such times as may be necessary for the business of the LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

     Mark Wortley   Chief Executive Officer and President

     Angela Scott   Senior Vice President of Operations

     John King      Chief Financial Officer and Treasurer

     Roland Rapp    Chief Administrative Officer and Secretary

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Senior Vice President of Operations. The Senior Vice President of
Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.


                                        3



Section 5.06 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

     (a) record all the actions taken by the Member, Officers and the Board of
Managers in a book to be kept for that purpose;

     (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

     (c) be custodian of the records; and

     (d) see that all of the books, reports, statements, certificates and all
other documents and records required to be kept by statute or this Agreement are
properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs of investigation and appeal) suffered or
incurred by any such Indemnitee by reason of, or arising from, the operations,
business, or affairs of, or any action taken or failure to act on behalf of, the
LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

     (a) Assignments. The Member may, with prior written notice to the LLC and
in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

     (b) Resignation. If the Member resigns pursuant to this Section 7.01(b), an
additional member of the LLC may be admitted to the LLC, subject to Sections
7.01(c), upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the LLC.

     (c) Admission of Additional Members. One or more additional members of the
LLC may be admitted to the LLC with the written consent of the Member.

     (d) Dissolution. The LLC shall be dissolved, and its affairs shall be wound
up upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the LLC or the occurrence of any other
event which terminates the continued membership of the last remaining member of
the LLC in the LLC unless the LLC is continued without dissolution in a manner
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.


                                        4



Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                        5



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Skilled Healthcare, LLC, a Delaware
                                        limited liability company


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                             DESCRIPTION OF PROPERTY


PROPERTY NAME             ADDRESS
- -------------             -------
                       
Preferred Design Office   501 Garrison Avenue, Suite #8
                          Fort Smith, AR 72901



                                       A-1



                                    EXHIBIT B
                                INITIAL MANAGERS

Mark Wortley

John King

Roland Rapp


                                       B-1

EX-3.231

                                                                   Exhibit 3.231

                            CERTIFICATE OF FORMATION

                                       OF

              ST. JOSEPH'S TRANSITIONAL REHABILITATION CENTER , LLC

         This Certificate of Formation of St. Joseph's Transitional
Rehabilitation Center, LLC is being duly executed and filed by an authorized
person to form a limited liability company under the Delaware Limited Liability
Company Act (6 Del.C. Section 18-101, et. seq.).

         FIRST. The name of the limited liability company formed hereby is:

              ST. JOSEPH'S TRANSITIONAL REHABILITATION CENTER , LLC

         SECOND. The address of the registered office and the name and the
address of the registered agent of the limited liability company required to be
maintained by Section 18-104 of the Delaware Limited Liability Company Act is:

                           NATIONAL REGISTERED AGENTS, INC.
                           160 GREENTREE DRIVE, SUITE 101
                           DOVER, KENT COUNTY, DELAWARE, 19904

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of April 27, 2006.

                                              /s/ Cindy M. VanDran
                                              --------------------------
                                              Cindy M. VanDran
                                              Authorized Person

                                STATE OF DELAWARE
                            CERTIFICATE OF AMENDMENT

                                       FOR

               ST. JOSEPH'S TRANSITIONAL REHABILITATION CENTER, LP

     FIRST. The name of the limited liability company is:

               ST. JOSEPH'S TRANSITIONAL REHABILITATION CENTER, LP

     SECOND. The Certificate of Formation of the limited liability company is
hereby amended to change the name to:

                ST. JOSEPH TRANSITIONAL REHABILTATION CENTER, LP

     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of May 1, 2006.


                                        /s/ Cindy M. VanDran
                                        ----------------------------------------
                                        Cindy M. VanDran
                                        Authorized Person

EX-3.232

                                                                   Exhibit 3.232

                LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
               ST. JOSEPH TRANSITIONAL REHABILITATION CENTER, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

This Limited Liability Company Operating Agreement (together with the exhibits
attached hereto, this "Agreement") of St. Joseph Transitional Rehabilitation
Center, LLC (the "LLC"), is entered into by Summit Care Corporation, as the sole
equity member (the "Member"), effective as of May 4, 2006 (the "Effective
Date").

The Member, by execution of this Agreement, hereby forms the LLC as a limited
liability company pursuant to, and in accordance with, the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq. (the "Act"), and, in
connection therewith, hereby agrees as follows:

                  ARTICLE I - ORGANIZATIONAL AND OTHER MATTERS

Section 1.01 Name. The name of the LLC is St. Joseph Transitional Rehabilitation
Center, LLC (the "LLC").

Section 1.02 Principal Business Office. The principal business office of the LLC
shall be located at 27442 Portola Parkway, Suite 200, Foothill Ranch, California
92610 or such other location as may hereafter be determined by the Member.

Section 1.03 Registered Office. The address of the registered office of the LLC
in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree
Drive, Suite 101, Dover, Delaware 19904.

Section 1.04 Registered Agent. The name and address of the registered agent of
the LLC for service of process on the LLC in the State of Delaware is National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904.

Section 1.05 Term. The LLC shall have a perpetual existence.

Section 1.06 Certificate of Formation. The LLC was formed as a limited liability
company under the Act by the filing of a Certificate of Formation by Cindy
VanDran, as an authorized person, with the Secretary of State of the State of
Delaware on May 4, 2006, as the same may be amended, restated or supplemented
from time to time. Upon the filing of the Certificate of Formation with the
Secretary of State of the State of Delaware, her powers as an "authorized
person" ceased, and the Member thereupon became the designated "authorized
person" and shall continue as the designated "authorized person" within the
meaning of the Act. The Member or an Officer shall execute, deliver and file any
other certificates (and any amendments, supplements and/or restatements thereof)
necessary for the LLC to qualify to do business in the state of California and
in any jurisdiction in which the LLC may wish to conduct business. The existence
of the LLC as a separate legal entity shall continue until cancellation of the
Certificate of Formation as provided in the Act.

                              ARTICLE II - PURPOSE

Section 2.01 Purpose. The purpose to be conducted or promoted by the LLC is to
engage in the following activities:

     (a) managing and operating the health care facility located on the real
property described on Exhibit A attached hereto and incorporated herein by this
reference, including leasing such real property (the "Facility Operations"); and

     (b) engaging in any lawful act or activity and exercising any powers
permitted to limited liability companies organized under the laws of the State
of Delaware.

                         ARTICLE III - BOARD OF MANAGERS

Section 3.01 Board of Managers. Pursuant to Section 18-402 of the Act, and to
the extent specifically set forth in this Agreement, certain activities of the
LLC shall be managed through a Board of Managers (the "Board of Managers"). The
Board of Managers shall have the following characteristics:

     (a) the Board of Managers shall be composed of no less than three
individuals (each, a "Manager").

     (b) the initial Managers shall be as set forth on Exhibit B attached hereto
and incorporated herein by this reference;


                                       1



     (c) all actions of the Board of Managers shall require a majority vote of
the quorum of the Managers; provided, however, that the Board of Managers may
delegate the day-to-day management of the LLC to an individual(s) or entity
which may or may not be a Manager;

     (d) the Board of Managers shall meet at such times as may be necessary for
the business of the LLC upon at least five business days' prior written notice
of the time, place and purpose of the meeting given by any two Managers.
Meetings of the Board of Managers may be in person or by conference telephone or
other similar communications system, and actions of the Board of Managers may be
by written consent (in which case, no notice shall be required), which written
consents, except as otherwise expressly required in this Agreement, shall be
effective if signed in one or more counterparts by a majority of the Managers.
The presence of two Managers, in person or by proxy, shall constitute a quorum.
Each Manager has the right to one vote. Each Manager not only has the right to
his own vote, but may vote by proxy for one other Manager;

     (e) the Member may remove any Manager for any reason or no reason by
executing a certificate setting forth the Manager being removed and the
replacement Manager;

     (f) in the event there exists a vacancy on the Board of Managers, the
Member shall, as soon as reasonably practicable, execute a certificate setting
forth a replacement Manager; and

     (g) the debts, obligations and liabilities of the LLC, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and no Manager shall be obligated for any such debt,
obligation or liability of the LLC solely by reason of its acting as a Manager
of the LLC.

                               ARTICLE IV - MEMBER

Section 4.01 Member. Simultaneously with the execution and delivery of this
Agreement, the following Person is admitted as the sole equity member of the LLC
(the "Member") and shall hold all Membership Interests (as defined in Section
4.02 below) effective as of the date of this Agreement. The name and address of
the Member is as follows:

     Name and Address

     Summit Care Corporation
     27442 Portola Parkway, Suite 200
     Foothill Ranch, California 92610
     Attn: Legal Department

Section 4.02 Unit Certificates. The limited liability company interests of the
LLC shall consist of 100 units (the "Membership Interests"), which shall be
evidenced by a unit certificate issued to the Member (the "Unit Certificate").
The Member hereby irrevocably elects that all Membership Interests in the LLC
shall be securities governed by Article 8 of the Uniform Commercial Code as in
effect in the State of Delaware and each other applicable jurisdiction. The Unit
Certificate shall bear the following legend:

     "This certificate evidences a membership interest in St. Joseph
     Transitional Rehabilitation Center, LLC and shall be a security governed by
     Article 8 of the Uniform Commercial Code as in effect in the State of
     Delaware and, to the extent permitted by applicable law, Article 8 of the
     Uniform Commercial Code of each other applicable jurisdiction."

     "THIS CERTIFICATE AND THE MEMBERSHIP INTEREST EVIDENCED HEREBY ARE NOT
     NEGOTIABLE AND ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE TRANSFER
     RESTRICTIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT. The Limited
     Liability Company maintains books for the purpose of registering transfers.
     This Certificate has not been and will not be registered under the
     Securities Act of 1933 or under the securities or blue sky laws of any
     state. The holder of this Certificate, by its acceptance hereof, represents
     that it is acquiring this security for investment and not with a view to
     any sale or distribution hereof."

This provision shall not be amended, and any purported amendment to this
provision, shall be null and void.

Section 4.03 Powers. The Member shall have the right and authority to take all
actions (i) specifically enumerated in this Agreement or (ii) which such Member
otherwise deems necessary, useful or appropriate for the day-to-day management
and conduct of the LLC's business and which are not otherwise specifically
reserved to the Managers.

Section 4.04 Liability. The Member shall not have any liability for the
obligations of the LLC except to the extent provided herein. Except as required
by the Act, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Member shall not be obligated for any such debt,
obligation or liability of the LLC solely by reason of its status as the Member
of the LLC.


                                       2



Section 4.05 Allocations and Distributions. The LLC's profits and losses shall
be allocated to the Member. At the time determined by a majority of the
Managers, the Managers may cause the LLC to distribute to the Member any cash
held by it which is neither reasonably necessary for the operation of the LLC
nor the performance of its contractual obligations, nor which is in violation of
Sections 18-607 or 18-804 of the Act or any contractual agreement binding on the
LLC.

                              ARTICLE V - OFFICERS

Section 5.01 Officers. The day-to-day operation of the business of the LLC shall
be managed by officers (the "Officers") to the extent specifically set forth in
this Agreement and under the direction of the Member and the Board of Managers.
The Officers shall:

     (a)  be comprised minimally of a President, Chief Financial Officer, Vice
          President, and Secretary;

     (b)  be selected by the Member;

     (c)  be allowed to serve on the Board of Managers;

     (d)  serve so long as the Member desires or until their resignation, death
          or incapacitation; and

     (e)  meet at such times as may be necessary for the business of the LLC.

Section 5.02 Initial Officers. The initial Officers shall take office upon the
execution of this Agreement by the Member and shall be:

     Jose Lynch      Chief Executive Officer and President
     Eddie Parades   Senior Vice President of Operations
     John King       Chief Financial Officer and Treasurer
     Roland Rapp     Chief Administrative Officer and Secretary

Section 5.03 Chief Executive Officer and President. The Chief Executive Officer
and President (the "President") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of President, have
general charge of the business, affairs and property of the LLC and general
supervision over the other Officers and any of the LLC's employees and agents
and see that all orders and resolutions of the LLC are carried into effect, and
discharge such duties as may be assigned to him or her by the Board of Managers
or the Member.

Section 5.04 Senior Vice President of Operations. The Senior Vice President of
Operations shall, under the direction of the Member and Board of Managers,
perform all duties incident to the office of Senior Vice President of Operations
and shall have such powers and discharge such duties as may be assigned to him
or her, from time to time, by the other Officers, Board of Managers or the
Member.

Section 5.05 Chief Financial Officer and Treasurer. The Chief Financial Officer
and Treasurer (the "Treasurer") shall, under the direction of the Member and
Board of Managers, perform all duties incident to the office of Treasurer and
shall have such powers and discharge such duties as may be assigned to him or
her, from time to time, by the other Officers, Board of Managers or the Member.

Section 5.06 Chief Administrative Officer and Secretary. The Chief
Administrative Officer and Secretary (the "Secretary") shall, under the
direction of the Member and Board of Managers, perform all duties incident to
the office of Secretary and shall have such powers and discharge such duties as
may be assigned to him or her, from time to time, by the other Officers, the
Member or the Board of Managers. The Secretary shall:

     (a) record all the actions taken by the Member, Officers and the Board of
Managers in a book to be kept for that purpose;

     (b) if required, cause notices to be duly given in accordance with the
provisions of the Agreement and as required by statute;

     (c) be custodian of the records; and

     (d) see that all of the books, reports, statements, certificates and all
other documents and records required to be kept by statute or this Agreement are
properly filed and kept.

                          ARTICLE VI - INDEMNIFICATION

The LLC shall indemnify and hold harmless (i) the Member, (ii) any affiliate of
the Member, and (iii) any officer, director, employee, or agent of the LLC, the
Member or any of its affiliates, (each, an "Indemnitee"), from and against any
claim, loss, damage, liability, or reasonable expense (including reasonable
attorneys' fees, court costs, and costs


                                       3



of investigation and appeal) suffered or incurred by any such Indemnitee by
reason of, or arising from, the operations, business, or affairs of, or any
action taken or failure to act on behalf of, the LLC.

                           ARTICLE VII - MISCELLANEOUS

Section 7.01 Assignments; Additions; Transfers; Dissolution

     (a) Assignments. The Member may, with prior written notice to the LLC and
in compliance with applicable laws, sell assign or convey its Membership
Interests at any time without the consent of the Managers. If the Member
transfers all of its Membership Interests pursuant to this Section 7.01(a), the
transferee shall be admitted to the LLC as a member of the LLC upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the transfer and, immediately following such admission, the transferor
Member shall cease to be a member of the LLC. Any successor to a Member by
merger or consolidation shall, without further act, be the Member hereunder, and
such merger or consolidation shall not constitute an assignment for purposes of
this Agreement and the LLC shall continue without dissolution.

     (b) Resignation. If the Member resigns pursuant to this Section 7.01(b), an
additional member of the LLC may be admitted to the LLC, subject to Sections
7.01(c), upon its execution of an instrument signifying its agreement to be
bound by the terms and conditions of this Agreement, which instrument may be a
counterpart signature page to this Agreement. Such admission shall be deemed
effective immediately prior to the resignation and, immediately following such
admission, the resigning Member shall cease to be a member of the LLC.

     (c) Admission of Additional Members. One or more additional members of the
LLC may be admitted to the LLC with the written consent of the Member.

     (d) Dissolution. The LLC shall be dissolved, and its affairs shall be wound
up upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the LLC or the occurrence of any other
event which terminates the continued membership of the last remaining member of
the LLC in the LLC unless the LLC is continued without dissolution in a manner
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act.

Section 7.02 Amendments. Subject to the provisions set forth herein, this
Agreement may be modified, altered, supplemented or amended pursuant to a
written agreement executed and delivered by the Member or any successor Member.

Section 7.03 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without regard to
principles of conflicts of laws).

Section 7.04 Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

Section 7.05 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

Section 7.06 Facsimile Signatures. This Agreement maybe executed by facsimile
transmission and such facsimile will be valid and binding to the same extent as
if it were an original.

                            [SIGNATURE PAGE FOLLOWS]


                                       4



IN WITNESS WHEREOF, the Member has executed this Agreement effective as of the
Effective Date.

                                        MEMBER:

                                        Summit Care Corporation, a California
                                        corporation


                                        By: /s/ Roland Rapp
                                            ------------------------------------
                                            Roland Rapp, Secretary


                                       S-1



                                    EXHIBIT A
                             DESCRIPTION OF PROPERTY



                   PROPERTY NAME                              ADDRESS
                   -------------                              -------
                                                  
St. Joseph Transitional Rehabilitation Center, LLC   2035 W. Charleston Blvd.
                                                     Las Vegas, NV 89102



                                       A-1



                                    EXHIBIT B
                                INITIAL MANAGERS

Jose Lynch

John King

Roland Rapp


                                       B-1

EX-4.1

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

================================================================================

                              SHG ACQUISITION CORP.
                                     Issuer

            to be merged with and into SKILLED HEALTHCARE GROUP, INC.

                     11% Senior Subordinated Notes Due 2014

                                   ----------

                                    INDENTURE

                          Dated as of December 27, 2005

                                   ----------

                                WELLS FARGO BANK,
                              NATIONAL ASSOCIATION
                                     Trustee

================================================================================



                              CROSS-REFERENCE TABLE



                                                                       Indenture
     TIA Section                                                        Section
     -----------                                                      ----------
                                                                   
310(a)(1)             .............................................   7.11
   (a)(2)             .............................................   7.11
   (a)(3)             .............................................   N.A.
   (a)(4)             .............................................   N.A.
   (b)                .............................................   7.09; 7.11
   (c)                .............................................   N.A.
311(a)                .............................................   7.12
   (b)                .............................................   7.12
   (c)                .............................................   N.A.
312(a)                .............................................   2.05
   (b)                .............................................   13.03
   (c)                .............................................   13.03
313(a)                .............................................   7.07
   (b)(1)             .............................................   N.A.
   (b)(2)             .............................................   7.07
   (c)                .............................................   13.02
   (d)                .............................................   7.07
314(a)                .............................................   4.02;
                      .............................................   4.10; 13.02
   (b)                .............................................   N.A.
   (c)(1)             .............................................   13.04
   (c)(2)             .............................................   13.04
   (c)(3)             .............................................   N.A.
   (d)                .............................................   N.A.
   (e)                .............................................   13.05
   (f)                .............................................   4.10
315(a)                .............................................   7.01
   (b)                .............................................   7.06; 13.02
   (c)                .............................................   7.01
   (d)                .............................................   7.01
   (e)                .............................................   6.11
316(a)(last sentence) .............................................   13.0
   (a)(1)(A)          .............................................   6.05
   (a)(1)(B)          .............................................   6.04
   (a)(2)             .............................................   N.A.
   (b)                .............................................   6.07
317(a)(1)             .............................................   6.08
   (a)(2)             .............................................   6.09
   (b)                .............................................   2.04
318(a)                .............................................   13.01


                                N.A. means Not Applicable.

- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
     part of the Indenture.



                                                                               i


                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
                                   ARTICLE ONE

SECTION 1.01.    Definitions.............................................     1
SECTION 1.02.    Other Definitions.......................................    27
SECTION 1.03.    Incorporation by Reference of Trust Indenture Act.......    27
SECTION 1.04.    Rules of Construction...................................    28

                                   ARTICLE TWO

                                    THE NOTES

SECTION 2.01.    Form and Dating.........................................    29
SECTION 2.02.    Execution and Authentication............................    29
SECTION 2.03.    Registrar and Paying Agent..............................    30
SECTION 2.04.    Paying Agent To Hold Money in Trust.....................    30
SECTION 2.05.    Noteholder Lists........................................    30
SECTION 2.06.    Transfer and Exchange...................................    30
SECTION 2.07.    Replacement Notes.......................................    31
SECTION 2.08.    Outstanding Notes.......................................    31
SECTION 2.09.    Treasury Notes..........................................    31
SECTION 2.10.    Temporary Notes.........................................    32
SECTION 2.11.    Cancellation............................................    32
SECTION 2.12.    Defaulted Interest......................................    32
SECTION 2.13.    CUSIP Numbers, ISINs, etc...............................    32
SECTION 2.14.    Issuance of Additional Notes............................    32

                                  ARTICLE THREE

                                   REDEMPTION

SECTION 3.01.    Notices to Trustee......................................    34
SECTION 3.02.    Selection of Notes to Be Redeemed.......................    34
SECTION 3.03.    Notice of Redemption....................................    34
SECTION 3.04.    Effect of Notice of Redemption..........................    35
SECTION 3.05.    Deposit of Redemption Price.............................    35
SECTION 3.06.    Notes Redeemed in Part..................................    35

                                  ARTICLE FOUR

                                    COVENANTS

SECTION 4.01.    Payment of Notes........................................    36
SECTION 4.02.    SEC Reports.............................................    36




                                                                              ii


                                                                         
SECTION 4.03.    Limitation on Indebtedness and Issuance of Preferred
                    Stock................................................    37
SECTION 4.04.    Limitation on Restricted Payments.......................    41
SECTION 4.05.    Dividend and Other Payment Restrictions.................    45
SECTION 4.06.    Limitation on Sales of Assets and Subsidiary Stock......    46
SECTION 4.07.    Limitation on Affiliate Transactions....................    50
SECTION 4.08.    Limitation on Line of Business..........................    52
SECTION 4.09.    Designation of Restricted and Unrestricted
                     Subsidiaries........................................    52
SECTION 4.10.    Change of Control.......................................    53
SECTION 4.11.    Limitation on Liens.....................................    54
SECTION 4.12.    Limitation on Other Senior Subordinated Indebtedness....    54
SECTION 4.13.    Future Guaranties.......................................    55
SECTION 4.14.    Compliance Certificate..................................    55

                                  ARTICLE FIVE

                                SUCCESSOR COMPANY

SECTION 5.01.    When Company May Merge or Transfer Assets...............    56

                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES

SECTION 6.01.    Events of Default.......................................    59
SECTION 6.02.    Acceleration............................................    61
SECTION 6.03.    Other Remedies..........................................    61
SECTION 6.04.    Waiver of Past Defaults.................................    61
SECTION 6.05.    Control by Majority.....................................    61
SECTION 6.06.    Limitation on Suits.....................................    62
SECTION 6.07.    Rights of Holders to Receive Payment....................    62
SECTION 6.08.    Collection Suit by Trustee..............................    62
SECTION 6.09.    Trustee May File Proofs of Claim........................    62
SECTION 6.10.    Priorities..............................................    63
SECTION 6.11.    Undertaking for Costs...................................    63
SECTION 6.12.    Waiver of Stay or Extension Laws........................    63

                                  ARTICLE SEVEN

                                     TRUSTEE

SECTION 7.01.    Duties of Trustee.......................................    65
SECTION 7.02.    Notice of Defaults......................................    66
SECTION 7.03.    Rights of Trustee.......................................    66
SECTION 7.04.    Individual Rights of Trustee............................    66
SECTION 7.05.    Trustee's Disclaimer....................................    67
SECTION 7.06.    Reserved................................................    67
SECTION 7.07.    Reports by Trustee to Holders...........................    67





                                                                             iii


                                                                         
SECTION 7.08.    Compensation and Indemnity..............................    67
SECTION 7.09.    Replacement of Trustee..................................    68
SECTION 7.10.    Successor Trustee by Merger.............................    68
SECTION 7.11.    Eligibility; Disqualification...........................    69
SECTION 7.12.    Preferential Collection of Claims Against Company.......    69

                                  ARTICLE EIGHT

                       DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.    Discharge of Liability on Notes; Defeasance.............    70
SECTION 8.02.    Conditions to Defeasance................................    71
SECTION 8.03.    Application of Trust Money..............................    72
SECTION 8.04.    Repayment to Company....................................    72
SECTION 8.05.    Indemnity for Government Obligations....................    72
SECTION 8.06.    Reinstatement...........................................    72

                                  ARTICLE NINE

                                   AMENDMENTS

SECTION 9.01.    Without Consent of Holders..............................    73
SECTION 9.02.    With Consent of Holders.................................    74
SECTION 9.03.    Compliance with Trust Indenture Act.....................    75
SECTION 9.04.    Revocation and Effect of Consents and Waivers...........    75
SECTION 9.05.    Notation on or Exchange of Notes........................    75
SECTION 9.06.    Trustee To Sign Amendments..............................    75
SECTION 9.07.    Payment for Consent.....................................    76

                                   ARTICLE TEN

                                  SUBORDINATION

SECTION 10.01.   Agreement To Subordinate................................    77
SECTION 10.02.   Liquidation, Dissolution, Bankruptcy....................    77
SECTION 10.03.   Default on Senior Indebtedness of the Company...........    77
SECTION 10.04.   Acceleration of Payment of Notes........................    78
SECTION 10.05.   When Distribution Must Be Paid Over.....................    78
SECTION 10.06.   Subrogation.............................................    78
SECTION 10.07.   Relative Rights.........................................    79
SECTION 10.08.   Subordination May Not Be Impaired by Company............    79
SECTION 10.09.   Rights of Trustee and Paying Agent......................    79
SECTION 10.10.   Distribution or Notice to Representative................    80
SECTION 10.11.   Article Ten Not To Prevent Events of Default or Limit
                    Right To Accelerate..................................    80
SECTION 10.12.   Trust Moneys Not Subordinated...........................    80
SECTION 10.13.   Trustee Entitled To Rely................................    80





                                                                              iv


                                                                         
SECTION 10.14.   Trustee To Effectuate Subordination.....................    80
SECTION 10.15.   Trustee Not Fiduciary for Holders of Senior Indebtedness
                    of the Company.......................................    81
SECTION 10.16.   Reliance by Holders of Senior Indebtedness of the
                    Company on Subordination Provisions..................    81

                                 ARTICLE ELEVEN

                              SUBSIDIARY GUARANTIES

SECTION 11.01.   Guaranties..............................................    82
SECTION 11.02.   Limitation on Liability.................................    84
SECTION 11.03.   Successors and Assigns..................................    84
SECTION 11.04.   No Waiver...............................................    84
SECTION 11.05.   Modification............................................    84
SECTION 11.06.   Release of Subsidiary Guarantor.........................    84
SECTION 11.07.   Contribution............................................    85

                                 ARTICLE TWELVE

                     SUBORDINATION OF SUBSIDIARY GUARANTIES

SECTION 12.01.   Agreement To Subordinate................................    86
SECTION 12.02.   Liquidation, Dissolution, Bankruptcy....................    86
SECTION 12.03.   Default on Senior Indebtedness of Subsidiary Guarantor..    86
SECTION 12.04.   Demand for Payment......................................    87
SECTION 12.05.   When Distribution Must Be Paid Over.....................    87
SECTION 12.06.   Subrogation.............................................    88
SECTION 12.07.   Relative Rights.........................................    88
SECTION 12.08.   Subordination May Not Be Impaired by Company............    88
SECTION 12.09.   Rights of Trustee and Paying Agent......................    88
SECTION 12.10.   Distribution or Notice to Representative................    89
SECTION 12.11.   Article Twelve Not To Prevent Events of Default or Limit
                    Right To Demand Payment..............................    89
SECTION 12.12.   Trustee Entitled To Rely................................    89
SECTION 12.13.   Trustee To Effectuate Subordination.....................    89
SECTION 12.14.   Trustee Not Fiduciary for Holders  of Senior
                    Indebtedness of Subsidiary Guarantor.................    90
SECTION 12.15.   Reliance by Holders of Senior Indebtedness of Subsidiary
                    Guarantors on Subordination Provisions...............    90

                                ARTICLE THIRTEEN

                                  MISCELLANEOUS

SECTION 13.01.   Trust Indenture Act Controls............................    91
SECTION 13.02.   Notices.................................................    91





                                                                               v


                                                                         
SECTION 13.03.   Communication by Holders with Other Holders.............    91
SECTION 13.04.   Certificate and Opinion as to Conditions Precedent......    92
SECTION 13.05.   Statements Required in Certificate or Opinion...........    92
SECTION 13.06.   When Notes Disregarded..................................    92
SECTION 13.07.   Rules by Trustee, Paying Agent and Registrar............    92
SECTION 13.08.   Legal Holidays..........................................    92
SECTION 13.09.   Governing Law...........................................    93
SECTION 13.10.   No Recourse Against Others..............................    93
SECTION 13.11.   Successors..............................................    93
SECTION 13.12.   Multiple Originals......................................    93
SECTION 13.13.   Table of Contents; Headings.............................    93



Rule 144A/Regulation S/IAI Appendix

Exhibit 1 - Form of Initial Note

Exhibit A - Form of Exchange Note or Private Exchange Note


          INDENTURE dated as of December 27, 2005 (this "Indenture"), among SHG
ACQUISITION CORP., a Delaware corporation and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee (the "Trustee"), and upon consummation of the Merger (as
defined herein), SKILLED HEALTHCARE GROUP, INC., a Delaware corporation, and the
Subsidiary Guarantors (as defined below).

          Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Initial Notes,
Exchange Notes and Private Exchange Notes (collectively, the "Notes").

                                   ARTICLE ONE

          SECTION 1.01. Definitions.

          "Acquired Debt" means, with respect to any specified Person:

          (1) Indebtedness of any other Person existing at the time such other
     Person is merged with or into or became a Subsidiary of such specified
     Person, whether or not such Indebtedness is incurred in connection with, or
     in contemplation of, such other Person merging with or into, or becoming a
     Subsidiary of such specified Person; and

          (2) Indebtedness secured by a Lien encumbering any asset acquired by
     such specified Person.

          "Adjusted Treasury Rate" means, with respect to any redemption date,
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities", for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after January 15, 2010, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest
month) or (2) if such release (or any successor release) is not published during
the week preceding the calculation date or does not contain such yields, the
rate per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date, in each case
calculated on the third Business Day immediately preceding the redemption date,
in each case, plus 0.50%.



                                                                               2


          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.

          "Applicable Premium" means with respect to a Note at any redemption
date, the greater of (1) 1.00% of the principal amount of such Note and (2) the
excess of (A) the present value at such redemption date of (i) the redemption
price of such Note on January 15, 2010 (such redemption price being described in
the fourth paragraph of Section 5 of the Notes exclusive of any accrued
interest) plus (ii) all required remaining scheduled interest payments due on
such Note through January 15, 2010 (but excluding accrued and unpaid interest to
the redemption date), computed using a discount rate equal to the Adjusted
Treasury Rate, over (B) the principal amount of such Note on such redemption
date.

          "Asset Sale" means:

          (1) the sale, lease, conveyance or other disposition (a "Disposition")
     of any assets or rights (including by way of a sale and leaseback) outside
     of the ordinary course of business (provided, however, that the sale,
     lease, conveyance or other disposition of all or substantially all of the
     assets of the Company and its Restricted Subsidiaries taken as a whole will
     be governed by the provisions of Sections 4.10 and 5.01 of this Indenture
     and not by the provisions of Section 4.06 of this Indenture); and

          (2) the issue or sale by the Company or any Restricted Subsidiary of
     Equity Interests of any of the Company's Restricted Subsidiaries;

in the case of either clause (1) or (2), whether in a single transaction or a
series of related transactions:

               (A) that have a fair market value in excess of $5.0 million; or

               (B) for net proceeds in excess of $5.0 million.

          Notwithstanding the preceding, the following items shall not be deemed
to be Asset Sales:

          (1) a Disposition of assets by the Company to the Company or a
     Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
     any other Restricted Subsidiary;

          (2) an issuance of Equity Interests by a Restricted Subsidiary to the
     Company or to another Restricted Subsidiary;



                                                                               3


          (3) the issuance of Equity Interests by a Restricted Subsidiary in
     which the percentage interest (direct and indirect) in the Equity Interests
     of such Person owned by the Company after giving effect to such issuance,
     is at least equal to the percentage interest prior to such issuance;

          (4) a Restricted Payment that is permitted by Section 4.04 of this
     Indenture;

          (5) a Disposition in the ordinary course of business;

          (6) any Liens permitted by this Indenture and foreclosures thereon;

          (7) any exchange of property pursuant to Section 1031 of the Code for
     use in a Permitted Business;

          (8) the license or sublicense of intellectual property or other
     general intangibles;

          (9) the lease or sublease of property in the ordinary course of
     business so long as the same does not materially interfere with the
     business of the Company and its Restricted Subsidiaries taken as a whole;
     and

          (10) the sale or other disposition of cash or Cash Equivalents.

          "Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value of the total obligations
of the lessee for net rental payments during the remaining term of the lease
included in such Sale and Leaseback Transaction. For purposes hereof such
present value shall be calculated using a discount rate equal to the rate of
interest implicit in such Sale and Leaseback Transaction, determined by lessee
in good faith on a basis consistent with comparable determinations of Capital
Lease Obligations under GAAP; provided, however, that if such sale and leaseback
transaction results in a Capital Lease Obligation, the amount of Indebtedness
represented thereby will be determined in accordance with the definition of
"Capital Lease Obligation."

          "Bankruptcy Cases" means Case No. LA 01 39678BB through LA 01 39697BB
and LA 01 45516BB, LA 01 45520BB and LA 01 45525BB, in the United States
Bankruptcy Court for the Central District of California, Los Angeles Division,
which were the bankruptcy proceedings related to Company and certain of its
Subsidiaries.

          "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

          "Board of Directors" means (1) with respect to a Person that is a
corporation or limited liability company, the board of directors, board of
managers or equivalent governing board of such Person or any duly authorized
committee thereof, (2) with respect to a Person that is a limited partnership,
the board of directors, board of



                                                                               4


managers or equivalent governing board of such Person's general partner, and (3)
with respect to any other Person, the governing body of such Person most closely
approximating the governing bodies contemplated in the preceding clauses (1) and
(2).

          "Board Resolution" means a copy of a resolution certified by the
secretary or an assistant secretary of any Person to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.

          "Business Day" means each day which is not a Legal Holiday.

          "Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.

          "Capital Stock" means:

          (a) in the case of a corporation, corporate stock;

          (b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

          (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

          (d) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

          "Cash Equivalents" means:

          (1) United States dollars;

          (2) Government Securities having maturities of not more than twelve
     months from the date of acquisition;

          (3) time deposit accounts, term deposit accounts, money market deposit
     accounts, time deposits, bankers' acceptances, certificates of deposit and
     eurodollar time deposits with maturities of twelve months or less from the
     date of acquisition, bankers' acceptances with maturities of twelve months
     or less from the date of acquisition, overnight bank deposits, and demand
     deposit accounts in each case with any lender party to the Senior Credit
     Facilities or with any



                                                                               5


     domestic commercial bank having capital and surplus in excess of $500
     million and a Thomson Bank Watch Rating of "B" or better;

          (4) repurchase obligations with a term of not more than 30 days for
     underlying securities of the types described in clauses (2) and (3) above
     entered into with any financial institution meeting the qualifications
     specified in clause (3) above;

          (5) commercial paper having the rating of "P-2" (or higher) from
     Moody's or "A-2" (or higher) from Standard & Poor's and in each case
     maturing within twelve months after the date of acquisition; and

          (6) any fund investing substantially all its assets in investments
     that constitute Cash Equivalents of the kinds described in clauses (1)
     through (5) of this definition.

          "Change of Control" means the occurrence of any of the following:

          (1) the sale, lease, transfer, conveyance or other disposition (other
     than by way of merger or consolidation), in one or a series of related
     transactions, of all or substantially all of the assets of the Company and
     its Subsidiaries taken as a whole to any "person" (as such term is used in
     Section 13(d)(3) of the Exchange Act) other than the Sponsor or a Related
     Party of the Sponsor;

          (2) the adoption of a plan relating to the liquidation or dissolution
     of the Company;

          (3) prior to the first Public Equity Offering, the Sponsor and its
     Related Parties cease to be the "beneficial owners" (as defined in Rule
     13d-3 under the Exchange Act, except that a Person will be deemed to have
     "beneficial ownership" of all shares that any such Person has the right to
     acquire, whether such right is exercisable immediately or only after the
     passage of time), directly or indirectly, of a majority of the total voting
     power of the Voting Stock of the Company, whether as a result of the
     issuance of securities of the Company, any merger, consolidation,
     liquidation or dissolution of the Company, any direct or indirect transfer
     of securities by the Sponsor and its Related Parties or otherwise;

          (4) on or after the first Public Equity Offering with respect to the
     Company or any direct or indirect parent entity (the "Public Company"), if
     any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
     of the Exchange Act or any successor provisions to either of the
     foregoing), including any group acting for the purpose of acquiring,
     holding, voting or disposing of securities within the meaning of Rule
     13d-5(b)(1) under the Exchange Act, other than the Sponsor and its Related
     Parties, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
     Exchange Act, except that a Person will be deemed to have "beneficial
     ownership" of all shares that any such Person has the right to acquire,
     whether such right is exercisable immediately or only after the passage of
     time), directly or indirectly, of 35.0% or more of the total voting power
     of the Voting Stock of the



                                                                               6


     Public Company (or, if the Company is not wholly owned directly or
     indirectly by the Public Company, the Company); provided, however, that the
     Sponsor and its Related Parties are the "beneficial owners" (as defined in
     Rule 13d-3 under the Exchange Act, except that a Person will be deemed to
     have "beneficial ownership" of all shares that any such Person has the
     right to acquire, whether such right is exercisable immediately or only
     after the passage of time), directly or indirectly, in the aggregate of a
     lesser percentage of the total voting power of the Voting Stock of the
     Public Company (or, if applicable, the Company) than such other Person or
     group; or

          (5) the first day on which a majority of the members of the Board of
     Directors of the Company are not Continuing Directors of the Company.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.

          "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Notes from the redemption date to January 15, 2010, that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a maturity most
nearly equal to January 15, 2010.

          "Comparable Treasury Price" means, with respect to any redemption
date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of
three, or such lesser number as is obtained by the Trustee, Reference Treasury
Dealer Quotations for such redemption date.

          "Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus (minus)
to the extent deducted (added) in computing such Consolidated Net Income:

          (1) provision for taxes based on income or profits of such Person and
     its Subsidiaries for such period; plus (minus)

          (2) Fixed Charges; plus (minus)

          (3) depreciation, amortization (including amortization of goodwill and
     other intangibles but excluding amortization of prepaid cash expenses that
     were paid in a prior period) and other non-cash charges (excluding any such
     non-cash charge to the extent that it represents an accrual of or reserve
     for cash expenses in any future period or amortization of a prepaid cash
     expense that was paid in a prior period) of such Person and its
     Subsidiaries for such period; plus (minus)



                                                                               7


          (4) any non-capitalized transaction costs incurred in connection with
     actual or proposed financings, acquisitions or divestitures (including
     financing and refinancing fees and costs incurred in connection with the
     Transactions); plus

          (5) the amount of any payments to Affiliates of the type contemplated
     by clauses (8) or (9) of Section 4.07(b) of this Indenture made during the
     applicable period; plus (minus)

          (6) Minority Interest with respect to any Restricted Subsidiary; plus
     (minus)

          (7) Consolidated Restructuring Costs; plus (minus)

          (8) costs and expenses incurred in connection with the establishment
     and initial implementation of policies and procedures for complying with
     the Sarbanes-Oxley Act of 2002; plus (minus)

          (9) startup losses incurred in connection with acquisitions or initial
     openings of facilities; plus (minus)

          (10) all lease payments in respect of operating leases arising out of
     Sale and Leaseback Transactions with respect to which and to the extent
     that the Company or any Restricted Subsidiary was deemed to have incurred
     Attributable Debt.

          Notwithstanding the preceding, the provision for taxes on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Subsidiary of the referent Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the extent (and in the same
proportion) that Net Income of such Subsidiary was included in calculating
Consolidated Net Income of such Person.

          "Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication:

          (1) the interest expense of such Person and its Restricted
     Subsidiaries for such period, on a combined, consolidated basis, determined
     in accordance with GAAP (including amortization of original issue discount,
     non-cash interest payments, the interest component of all payments
     associated with Capital Lease Obligations, commissions, discounts and other
     fees and charges incurred in respect of letter of credit or bankers'
     acceptance financings, and net payments, if any, pursuant to Hedging
     Obligations; provided, however, that in no event shall any amortization of
     deferred financing costs be included in Consolidated Interest Expense) plus
     the interest component of all payments associated with Attributable Debt
     determined by such Person in good faith on a basis consistent with
     comparable determinations for Capital Lease Obligations under GAAP; plus



                                                                               8


          (2) the consolidated capitalized interest of such Person and its
     Restricted Subsidiaries for such period, whether paid or accrued.

          Notwithstanding the preceding, the Consolidated Interest Expense with
respect to any Restricted Subsidiary that is not a Wholly-Owned Subsidiary shall
be included only to the extent (and in the same proportion) that the net income
of such Restricted Subsidiary was included in calculating Consolidated Net
Income.

          "Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, plus (minus) to the extent deducted (added) in computing such Net
Income:

          (1) direct or indirect fees, costs, expenses and charges (including
     any penalties or premiums payable) of the Company related to the
     Transactions which are paid, taken or otherwise accounted for within one
     year of the consummation of the Transactions; plus (minus)

          (2) any gain or loss, together with any related provision for taxes on
     such gain or loss, realized in connection with (a) any Asset Sale or (b)
     the acquisition or disposition of any securities by such Person or any of
     its Restricted Subsidiaries plus (minus);

          (3) any extraordinary, nonrecurring or non-operating gain or loss,
     together with any related provision for taxes on such extraordinary,
     nonrecurring or non-operating gain or loss;

provided, however, that:

          (1) the Net Income (but not loss) of any Person that is not a
     Restricted Subsidiary (other than APS-Summit Care Pharmacy L.L.C., a
     Delaware limited liability company) or that is accounted for by the equity
     method of accounting shall be included only to the extent of the amount of
     dividends or distributions paid in cash to the referent Person or (subject
     to clause (2) below) a Restricted Subsidiary thereof;

          (2) the Net Income of any Restricted Subsidiary shall be excluded to
     the extent that the declaration or payment of dividends or similar
     distributions by such Restricted Subsidiary of such Net Income is not at
     the date of determination permitted without any prior governmental approval
     that has not been obtained or, directly or indirectly, by operation of the
     terms of its charter or any agreement, instrument, judgment, decree, order,
     statute, rule or governmental regulation applicable to such Subsidiary,
     except to the extent of the amount of dividends or other distributions
     actually paid to the Company or any of its Restricted Subsidiaries by such
     Restricted Subsidiary during such period; and

          (3) the cumulative effect of a change in accounting principles shall
     be excluded.



                                                                               9


          "Consolidated Restructuring Costs" means, for any period,
restructuring or reorganization costs related to the Bankruptcy Cases incurred
by the Company and its Restricted Subsidiaries during such period, calculated in
accordance with GAAP; provided, however, that the aggregate amount of such costs
for any consecutive four fiscal quarter period shall not exceed $1,000,000.

          "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:

          (1) was a member of such Board of Directors of the Company on the
     Issue Date after giving effect to the Merger;

          (2) was nominated for election or elected to such Board of Directors
     of the Company with the approval of a majority of the Continuing Directors
     who were members of such Board of Directors at the time of such nomination
     or election; or

          (3) was nominated by the Sponsor or a Related Party thereof.

          "Contribution Indebtedness" means any Indebtedness or Preferred Stock
incurred pursuant to clause (16) of Section 4.03(b) of this Indenture.

          "Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.

          "Designated Non-cash Consideration" means, the fair market value of
non-cash consideration received by the Company or a Restricted Subsidiary in
connection with an Asset Sale that is so designated as Designated Non-cash
Consideration pursuant to an Officers' Certificate, setting forth the basis of
such valuation, executed by an executive vice president and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash
Consideration.

          "Designated Senior Debt" means:

          (1) any Indebtedness outstanding under the Senior Credit Facilities;
     and

          (2) any other Senior Indebtedness permitted under this Indenture the
     principal amount of which is $50.0 million or more and that has been
     designated by the Company as "Designated Senior Debt."

          "Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would not qualify as Disqualified
Stock but for change of control or asset sale provisions shall not constitute
Disqualified Stock if the provisions are not more favorable to the holders of
such Capital



                                                                              10


Stock than the provisions of Sections 4.10 and 4.06, respectively, of this
Indenture and such Capital Stock specifically provides that the Company will not
redeem or repurchase any such Capital Stock pursuant to such provisions prior to
the Company's purchase of the Notes as required pursuant to the provisions of
Section 4.10 and 4.06, respectively, of this Indenture.

          "Domestic Restricted Subsidiary" means, with respect to the Company,
any Restricted Subsidiary that was formed under the laws of the United States of
America or any State thereof or the District of Columbia.

          "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

          "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.

          "Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Senior Credit Facilities or
represented by the Initial Notes) in existence on the Issue Date after giving
effect to the Merger, until such amounts are repaid.

          "Fixed Charge Coverage Ratio" means with respect to any Person or
Persons for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the Company or any Restricted Subsidiary incurs, assumes, guarantees
or redeems any Indebtedness (other than revolving credit borrowings) or issues
or redeems Preferred Stock subsequent to the commencement of the period for
which the Fixed Charge Coverage Ratio is being calculated but on or prior to the
date on which the event for which the calculation of the Fixed Charge Coverage
Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
guarantee or redemption of Indebtedness, or such issuance or redemption of
Preferred Stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period.

          In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

          (1) acquisitions that have been made by the Company or any Restricted
     Subsidiary, including through mergers or consolidations and including any
     related financing transactions, during the four-quarter reference period or
     subsequent to such reference period and on or prior to the Calculation Date
     shall be calculated to include the Consolidated Cash Flow of the acquired
     entities on a pro forma basis (which shall be determined in good faith by
     the chief financial officer of the Company) after giving effect to Pro
     Forma Cost Savings, shall be deemed to have occurred on the first day of
     the four-quarter reference period;

          (2) the Consolidated Cash Flow attributable to operations or
     businesses disposed of prior to the Calculation Date shall be excluded;



                                                                              11


          (3) the Fixed Charges attributable to operations or businesses
     disposed of prior to the Calculation Date shall be excluded, but only to
     the extent that the obligations giving rise to such Fixed Charges will not
     be obligations of the specified Person or any of its Restricted
     Subsidiaries following the Calculation Date;

          (4) if (i) any Restricted Subsidiary is designated as an Unrestricted
     Subsidiary or (ii) any Unrestricted Subsidiary is designated as a
     Restricted Subsidiary, in either case during the four-quarter reference
     period or subsequent to such reference period and on or prior to the
     Calculation Date, such designation will be deemed to have occurred on the
     first day of the four-quarter reference period; and

          (5) if any Indebtedness bears a floating rate of interest, the
     interest expense on such Indebtedness shall be calculated as if the rate in
     effect on the Calculation Date had been the applicable rate for the entire
     period (taking into account any Hedging Obligation applicable to such
     Indebtedness if such Hedging Obligation has a remaining term as at the
     Calculation Date in excess of 12 months).

          "Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of:

          (1) the Consolidated Interest Expense of such Person for such period;
     plus

          (2) any interest expense on Indebtedness of another Person that is
     guaranteed by such Person or one of its Restricted Subsidiaries or secured
     by a Lien on assets of such Person or one of its Restricted Subsidiaries,
     whether or not such guarantee or Lien is called upon; plus

          (3) the product of (a) all dividend payments, whether paid or accrued
     and whether or not in cash, on any series of Preferred Stock of such Person
     or any of its Restricted Subsidiaries, other than dividend payments on
     Equity Interests payable solely in Qualified Equity Interests, times (b) a
     fraction, the numerator of which is one and the denominator of which is one
     minus the then current combined federal, state and local statutory tax rate
     of such Person, expressed as a decimal, in each case, on a consolidated
     basis and in accordance with GAAP.

          "Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.

          "GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in:

          (1) the opinions and pronouncements of the Accounting Principles Board
     of the American Institute of Certified Public Accountants;



                                                                              12


          (2) statements and pronouncements of the Financial Accounting
     Standards Board;

          (3) such other statements by such other entity as approved by a
     significant segment of the accounting profession; and

          (4) the rules and regulations of the SEC governing the inclusion of
     financial statements (including pro forma financial statements) in periodic
     reports required to be filed pursuant to Section 13 of the Exchange Act,
     including opinions and pronouncements in staff accounting bulletins and
     similar written statements from the accounting staff of the SEC.

          "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America and the payment for which the United
States pledges its full faith and credit.

          "guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including letters of credit and reimbursement agreements
in respect thereof, of all or any part of any Indebtedness.

          "Guaranty Agreement" means a supplemental indenture, in a form
reasonably acceptable to the Trustee, pursuant to which a Subsidiary Guarantor
guarantees the Company's obligations under this Indenture and with respect to
the Notes on the terms provided for in Article 11 of this Indenture.

          "Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:

          (1) interest rate swap agreements, interest rate cap agreements and
     interest rate collar agreements; and

          (2) other agreements or arrangements designed to change the allocation
     of risk due to fluctuations in interest rates, currency exchange rates or
     commodity prices.

          "Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.

          "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, in respect of:

          (1) borrowed money;

          (2) obligations evidenced by bonds, notes, debentures or similar
     instruments or letters of credit (or reimbursement agreements in respect
     thereof);

          (3) bankers' acceptances;



                                                                              13


          (4) Capital Lease Obligations;

          (5) Attributable Debt; or

          (6) (a) the balance deferred and unpaid of the purchase price of any
     property, except any such balance that constitutes an accrued expense or
     trade payable or (b) representing the net amount payable in respect of any
     Hedging Obligations;

if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" with respect to a specified Person includes
(i) all Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by the specified Person),
but only to the extent that the aggregate amount of such Indebtedness does not
exceed fair market value of the asset and, to the extent not otherwise included,
the guarantee by such Person of any Indebtedness of any other Person; provided,
however, that Indebtedness shall not include the pledge by the Company of the
Capital Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of such
Unrestricted Subsidiary and (ii) all Disqualified Stock of the Specified Person.
In no event shall non-contractual obligations or liabilities in respect of any
Capital Stock constitute Indebtedness under this definition.

          The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above; provided, however, that in the case of Indebtedness sold at a discount or
which does not require current payments of interest, the amount of such
Indebtedness at any time will be the accreted value thereof at such time.

          "Indenture" means this Indenture as amended or supplemented from time
to time.

          "Insurance Subsidiary" means any Subsidiary of the Company (including
Fountain View Reinsurance, Ltd.) that is engaged solely in the medical
malpractice insurance business, workers compensation and other insurance
business for the underwriting of insurance policies for, or for the benefit of,
the Company and its Subsidiaries and Related Professional Corporations and those
employees, officers, directors and contractors of the foregoing Persons who
provide professional medical services to patients.

          "Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel advances and
other loans and advances to officers and employees made in the ordinary course
of business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet



                                                                              14


prepared in accordance with GAAP. If the Company or any Restricted Subsidiary
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary, then the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of determined at the time of such
sale or disposition. Notwithstanding the foregoing, purchases, redemptions or
other acquisitions of Equity Interests of the Company or any direct or indirect
parent of the Company shall not be deemed Investments. The amount of an
investment shall be determined at the time the Investment is made and without
giving effect to subsequent changes in value.

          "Issue Date" means December 27, 2005.

          "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.

          "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any option or
other agreement to sell or give a security interest in and any consensual filing
of any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction other than filings in respect of leases otherwise
permitted under this Indenture.

          "Management Agreement" means the Management Agreement to be dated as
of the Issue Date among the Company and Onex Partners Manager LP, as the same
may be amended, modified or replaced from time to time so long as any such
amendment, modification or replacement, taken as a whole, is no less favorable
in any material respect to the Company or any Restricted Subsidiary than the
contract or agreement as in effect on the Issue Date.

          "Merger" means the Merger of SHG Acquisition Corp. with and into
Skilled Healthcare Group, Inc. with Skilled Healthcare Group, Inc. continuing as
the surviving corporation pursuant to the Agreement and Plan of Merger, dated as
of October 22, 2005, among Skilled Healthcare Group, Inc., SHG Acquisition
Corp., SHG Holding Solutions, Inc., Heritage Partners Management Company, LLP,
Heritage Fund II L.P. and Heritage Investors II, L.L.C.

          "Minority Interest" means, with respect to any Person, interests in
income (loss) of any of such Person's Subsidiaries held by one or more Persons
other than such Person or another Subsidiary of such Person, as reflected on
such Person's consolidated financial statements.

          "Moody's" means Moody's Investment Service, Inc. and any successor to
its rating agency business.



                                                                              15


          "Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however:

          (1) any income or expense incurred in connection with the
     extinguishment of any Indebtedness of such Person or any of its Restricted
     Subsidiaries;

          (2) any depreciation, amortization, non-cash impairment or other
     non-cash charges or expenses recorded as a result of the application of
     purchase accounting in accordance with Accounting Principles Board Opinion
     Nos. 16 and 17 or SFAS Nos. 141 and 142; and

          (3) any gain, loss, income, expense or other charge recognized or
     incurred in connection with changes in value or dispositions of Investments
     made pursuant to clause (8) of the definition of Permitted Investments (it
     being understood that this clause (3) shall not apply to any expenses
     incurred in connection with the funding of contributions to any plan).

          "Net Proceeds" means the aggregate cash proceeds received by the
Company or any Restricted Subsidiary in respect of any Asset Sale (including any
cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset
Sale, including (a) fees and expenses related to such Asset Sale (including
legal, accounting and investment banking fees and discounts, and sales and
brokerage commissions, and any relocation expenses incurred as a result of the
Asset Sale), (b) taxes paid or payable as a result of the Asset Sale, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, (c) amounts required to be applied to the repayment of
Indebtedness, other than Indebtedness under the Senior Credit Facility, secured
by a Lien on the asset or assets that were the subject of such Asset Sale, (d)
any reserve in accordance with GAAP against any liabilities associated with such
Asset Sale and retained by the seller after such Asset Sale, including pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale and (e) cash escrows (until released from escrow
to the seller).

          "Non-Recourse Debt" means Indebtedness:

          (1) as to which neither the Company nor any Restricted Subsidiary:

               (a) provides credit support of any kind (including any
          undertaking, agreement or instrument that would constitute
          Indebtedness);

               (b) is directly or indirectly liable as a guarantor or otherwise;
          or

               (c) constitutes the lender;

          (2) no default with respect to which (including any rights that the
     holders thereof may have to take enforcement action against an Unrestricted
     Subsidiary)



                                                                              16


     would permit upon notice, lapse of time or both any holder of any other
     Indebtedness of the Company or any Restricted Subsidiary to declare a
     default on such other Indebtedness or cause the payment thereof to be
     accelerated or payable prior to its stated maturity; and

          (3) as to which the lenders have been notified in writing that they
     will not have any recourse to the stock (other than stock of an
     Unrestricted Subsidiary pledged by the Company to secure debt of such
     Unrestricted Subsidiary) or assets of the Company or such Restricted
     Subsidiary.

          "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

          "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

          "Officers' Certificate" means a certificate signed by two Officers.

          "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.

          "Permitted Business" means any business in which the Company and the
Restricted Subsidiaries are engaged on the Issue Date or any business reasonably
related, ancillary or complementary thereto, or reasonable extensions thereof.

          "Permitted Investments" means:

          (1) any Investment in the Company or in any Restricted Subsidiary;

          (2) any Investment in Cash Equivalents;

          (3) any Investment in a Person, if as a result of such Investment:

               (a) such Person becomes a Restricted Subsidiary; or

               (b) such Person is merged, consolidated or amalgamated with or
          into, or transfers or conveys substantially all of its assets to, or
          is liquidated into, the Company or a Restricted Subsidiary;

          (4) any Investment made as a result of the receipt of non-cash
     consideration from an Asset Sale that was made pursuant to and in
     compliance with Section 4.06 of this Indenture or any other disposition of
     assets not constituting an Asset Sale;

          (5) any Investment existing on the Issue Date;



                                                                              17


          (6) other Investments made after the Issue Date in a Permitted
     Business having an aggregate fair market value (measured on the date each
     such Investment was made and without giving effect to subsequent changes in
     value), when taken together with all other Investments made pursuant to
     this clause (6) after the Issue Date that are at the time outstanding, not
     to exceed the greater of (a) $15.0 million or (b) 2.0% of the Total Assets
     of the Company;

          (7) any Investment made for consideration consisting solely of
     Qualified Equity Interests;

          (8) any Investment made in connection with the funding of
     contributions under any non-qualified employee retirement plan or similar
     employee compensation plan in an amount not to exceed the amount of
     compensation expense recognized by the Company and any Restricted
     Subsidiary in connection with such plans;

          (9) any Investment received in compromise or resolution of (a)
     obligations of trade creditors or customers that were incurred in the
     ordinary course of business of the Company or any Restricted Subsidiary,
     including pursuant to any plan of reorganization or similar arrangement
     upon the bankruptcy or insolvency of any trade creditor or customer or (b)
     litigation, arbitration or other disputes with Persons that are not
     Affiliates;

          (10) Hedging Obligations permitted by Section 4.03 of this Indenture;

          (11) any Investment consisting of prepaid expenses, negotiable
     instruments held for collection and lease, endorsements for deposit or
     collection in the ordinary course of business, utility or workers
     compensation, performance and similar deposits entered into as a result of
     the operations of the business in the ordinary course of business;

          (12) pledges or deposits by a Person under workers compensation laws,
     unemployment insurance laws or similar legislation, or deposits in
     connection with bids, tenders, contracts (other than for the payment of
     Indebtedness) or leases to which such Person is a party, or deposits as
     security for contested taxes or import duties or for the payment of rent,
     in each case incurred in the ordinary course of business;

          (13) any Investment consisting of a loan or advance to officers,
     directors or employees of the Company or a Restricted Subsidiary in
     connection with the purchase by such Persons of Equity Interests of the
     Company or any direct or indirect parent of the Company so long as the cash
     proceeds of such purchase received by the Company or such other Person are
     contemporaneously contributed to the common equity capital of the Company;

          (14) loans or advances to employees made in the ordinary course of
     business of the Company or any Restricted Subsidiary of the Company in an
     aggregate principal amount not to exceed $2 million at any one time
     outstanding;



                                                                              18


          (15) repurchases of the Notes;

          (16) guarantees of Indebtedness permitted by Section 4.03 of this
     Indenture; and

          (17) other Investments made after the Issue Date in any Person having
     an aggregate fair market value (measured on the date each such Investment
     was made and without giving effect to subsequent changes in value), when
     taken together with all other Investments made pursuant to this clause (17)
     after the Issue Date, not to exceed the greater of (a) $15.0 million or (b)
     2.0% of the Total Assets of the Company.

          "Permitted Junior Securities" means:

          (1) Equity Interests in the Company or any Subsidiary Guarantor; or

          (2) debt securities that are subordinated to all Senior Indebtedness
     and any debt securities issued in exchange for Senior Indebtedness to
     substantially the same extent as, or to a greater extent than, the Notes
     and the Subsidiary Guaranties are subordinated to Senior Indebtedness under
     this Indenture.

          "Permitted Liens" means:

          (1) Liens in favor of the Company or any Restricted Subsidiary;

          (2) Liens on assets of the Company or any Restricted Subsidiary
     securing Senior Indebtedness that was permitted by the terms of this
     Indenture to be incurred;

          (3) Liens on property of a Person existing at the time such Person is
     merged into or consolidated with the Company or any Restricted Subsidiary,
     provided, however, that such Liens were not incurred in contemplation of
     such merger or consolidation and do not extend to any assets other than
     those of the Person merged into or consolidated with the Company or any
     Restricted Subsidiary;

          (4) Liens on property existing at the time of acquisition thereof by
     the Company or any Restricted Subsidiary, provided, however, that such
     Liens were not incurred in contemplation of such acquisition;

          (5) Liens to secure Indebtedness (including Capital Lease Obligations)
     permitted by clause (4) of Section 4.03(b) of this Indenture;

          (6) Liens to secure Refinancing Indebtedness where the Indebtedness
     being Refinanced was secured by the same assets; provided, however, that
     such Liens do not extend to any additional assets (other than improvements
     and accession thereon and replacements thereof or proceeds or distributions
     thereof);



                                                                              19


          (7) Liens incurred in the ordinary course of business of the Company
     or any Restricted Subsidiary with respect to obligations that do not exceed
     $7.5 million at any one time outstanding and that: (a) are not incurred in
     connection with the borrowing of money or the obtaining of advances or
     credit (other than trade credit in the ordinary course of business) and (b)
     do not in the aggregate materially detract from the value of the property
     or materially impair the use thereof in the operation of business by the
     Company or such Restricted Subsidiary;

          (8) Liens securing reimbursement obligations with respect to
     commercial letters of credit which encumber documents and other property
     relating to such letters of credit and products and proceeds thereof;

          (9) Liens created for the benefit of (or to secure) the Notes (or the
     Subsidiary Guaranties) or payment obligations to the Trustee;

          (10) Liens and rights of setoff in favor of a bank imposed by law and
     incurred in the ordinary course of business on deposit accounts maintained
     with such bank and cash and Cash Equivalents in such accounts;

          (11) Liens securing Hedging Obligations;

          (12) Liens to secure the performance of statutory obligations, surety
     or appeal bonds, performance bonds or other obligations of a like nature
     incurred in the ordinary course of business;

          (13) Liens existing on the date of this Indenture;

          (14) Liens for taxes, assessments or governmental charges or claims
     that are not yet delinquent or that are being contested in good faith by
     appropriate proceedings promptly instituted and diligently concluded;
     provided, however, that any reserve or other appropriate provision as is
     required in conformity with GAAP has been made therefor; and

          (15) Liens imposed by law, such as carriers', warehousemen's,
     landlord's and mechanics' Liens, in each case, incurred in the ordinary
     course of business.

          "Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any Restricted Subsidiary issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, defease or discharge or refund
(collectively, "Refinance") other Indebtedness of the Company or any Restricted
Subsidiary; provided, however, that:

          (1) the principal amount (or accreted value, if applicable) of such
     Permitted Refinancing Indebtedness does not exceed the principal amount of
     (or accreted value, if applicable), plus accrued interest on, the
     Indebtedness so extended, refinanced, renewed, replaced, discharged,
     defeased or refunded (plus the amount of reasonable expenses and premiums
     incurred in connection therewith);



                                                                              20


          (2) such Permitted Refinancing Indebtedness has a final maturity date
     no earlier than the final maturity date of, and has a Weighted Average Life
     to Maturity equal to or greater than the Weighted Average Life to Maturity
     of, the Indebtedness being extended, refinanced, renewed, defeased,
     discharged or refunded;

          (3) if the Indebtedness being extended, refinanced, renewed, replaced,
     defeased, refunded or discharged is subordinated in right of payment to the
     Notes, such Permitted Refinancing Indebtedness has a final maturity date
     later than the final maturity date of, and is subordinated in right of
     payment to, the Notes on terms at least as favorable to the Holders as
     those contained in the documentation governing the Indebtedness being
     extended, refinanced, renewed, defeased, discharged or refunded;

          (4) Indebtedness of a Restricted Subsidiary that is not a Subsidiary
     Guarantor may not be used to Refinance any Indebtedness of the Company or a
     Subsidiary Guarantor.

          "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

          "Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person. The "principal" amount of any Preferred Stock at any date shall be
the liquidation preference (or, if greater, the mandatory redemption price, if
any) of such Preferred Stock at such date.

          "principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.

          "Pro Forma Cost Savings" means, with respect to any period, the
reductions in costs (including such reductions resulting from employee
terminations, facilities consolidations and closings, standardization of
employee benefits and compensation policies, consolidation of property, casualty
and other insurance coverage and policies, standardization of sales and
distribution methods, reductions in taxes other than income taxes) that occurred
during such period that are (1) directly attributable to an asset acquisition or
(2) implemented, committed to be implemented, specifically identified to be
implemented or the commencement of implementation of which has begun in good
faith by the business that was the subject of any such asset acquisition within
six months of the date of the asset acquisition and that are supportable and
quantifiable by the underlying records of such business, as if, in the case of
each of clauses (1) and (2), all such reductions in costs had been effected as
of the beginning of



                                                                              21


such period, decreased by any incremental expenses incurred or to be incurred
during such period in order to achieve such reduction in costs, all such costs
to be determined in good faith by the chief financial officer of the Company.

          "Public Equity Offering" means an underwritten primary public offering
of common stock of the Company or any direct or indirect parent entity pursuant
to an effective registration statement under the Securities Act; provided,
however, in the case of the exercise by the Company of its option to redeem
Notes pursuant to the third paragraph of Paragraph 5 of the Notes, if such
offering is common stock of any such parent, the net proceeds therefrom are
contributed to the common equity capital of the Company.

          "Qualified Equity Interests" means Equity Interests of the Company
other than Disqualified Stock.

          "Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company.

          "Reference Treasury Dealer" means Credit Suisse First Boston LLC and
its successors and assigns, J.P. Morgan Securities Inc. and its successors and
assigns and one other nationally recognized investment banking firm selected by
the Company that is a primary U.S. Government securities dealer.

          "Reference Treasury Dealer Quotations" means with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day immediately preceding such redemption date.

          "Related Party" with respect to any Sponsor means:

          (1) any controlling stockholder or partner, 80% (or more) owned
     Subsidiary, or spouse or immediate family member (in the case of an
     individual) of such Sponsor; or

          (2) any trust, corporation, partnership or other entity, the
     beneficiaries, stockholders, partners, owners or Persons beneficially
     holding a 51% or more controlling interest of which consist of such Sponsor
     and/or such other Persons referred to in the immediately preceding clause
     (1);

provided, however, that "Related Party" shall not include any portfolio
operating companies of Sponsor.

          "Related Professional Corporation" means a professional corporation
that is owned by one or more physicians, independent contractor physicians or
healthcare facilities in each case (a) to whom the Company, any Restricted
Subsidiary of the Company or another Related Professional Corporation provides
management services



                                                                              22


pursuant to a management services, practice support or similar agreement and (b)
except for the effect of the preceding clause (a), is not otherwise an Affiliate
of the Company or its Restricted Subsidiaries.

          "Representative" means, with respect to a Person, any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person.

          "Restricted Investment" means an Investment other than a Permitted
Investment.

          "Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.

          "Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any such Restricted Subsidiary at the Issue Date
or later acquired, which has been or is to be sold or transferred by the Company
or any such Restricted Subsidiary to such Person or any other Person from whom
funds have been or are to be advanced by such Person on the security of such
property.

          "SEC" means the U.S. Securities and Exchange Commission.

          "Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.

          "Securities Act" means the U.S. Securities Act of 1933, as amended.

          "Senior Credit Facilities" means the Second Amended and Restated First
Lien Credit Agreement to be dated as of the Issue Date among the Company, SHG
Holding Solutions, Inc., Credit Suisse, Cayman Islands Branch, as administrative
agent and collateral agent and as sole lead arranger and sole bookrunner, and
the other agents and lenders named therein, providing for revolving credit
borrowings and term loans, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time including increases in principal amount.

          "Senior Indebtedness" means with respect to any Person:

          (1) Indebtedness of such Person, whether outstanding on the Issue Date
     or thereafter Incurred; and

          (2) all other Obligations of such Person (including interest accruing
     on or after the filing of any petition in bankruptcy or for reorganization
     relating to such Person whether or not post-filing interest is allowed in
     such proceeding) in respect of Indebtedness described in clause (1) above



                                                                              23


unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such Indebtedness or other obligations are subordinate or pari passu in
right of payment to the Notes or the Subsidiary Guaranty of such Person, as the
case may be; provided, however, that Senior Indebtedness shall not include:

          (1) any obligation of such Person to the Company or any Subsidiary;

          (2) any liability for federal, state, local or other taxes owed or
     owing by such Person;

          (3) any accounts payable or other liability to trade creditors arising
     in the ordinary course of business;

          (4) any Indebtedness or other Obligation of such Person which is
     subordinate or junior in any respect to any other Indebtedness or other
     Obligation of such Person; or

          (5) that portion of any Indebtedness which at the time of Incurrence
     is Incurred in violation of this Indenture.

          "Senior Subordinated Indebtedness" means, with respect to a Person,
the Notes (in the case of the Company), the Subsidiary Guaranty (in the case of
a Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari passu with the
Notes or such Subsidiary Guaranty, as the case may be, in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness or
other Obligation of such Person which is not Senior Indebtedness of such Person.

          "Significant Subsidiary" means any Restricted Subsidiary, or group of
Restricted Subsidiaries, that would be a "Significant Subsidiary" of the Company
within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

          "Sponsor" means Onex Partners LP, Onex Corporation and their
respective Affiliates other than portfolio operating companies of any of the
foregoing.

          "Standard & Poor's" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., and any successor to its rating agency business.

          "Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

          "Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter



                                                                              24


Incurred) which is subordinate or junior in right of payment to the Notes or a
Subsidiary Guaranty of such Person, as the case may be, pursuant to a written
agreement to that effect.

          "Subsidiary" means, with respect to any Person:

          (1) any corporation, association or other business entity of which
     more than 50% of the total voting power of shares of Capital Stock entitled
     (without regard to the occurrence of any contingency) to vote in the
     election of directors, managers or trustees thereof is at the time owned or
     controlled, directly or indirectly, by such Person or one or more of the
     other Subsidiaries of that Person (or a combination thereof); and

          (2) any partnership or limited liability company (a) the sole general
     partner or the managing general partner or managing member of which is such
     Person or a Subsidiary of such Person or (b) the only general partners of
     which are such Person or of one or more Subsidiaries of such Person (or any
     combination thereof).

          "Subsidiary Guarantor" means a Subsidiary of the Company that
guarantees the Company's payment obligations under this Indenture and the Notes
and upon consummation of the Merger, shall initially be those Subsidiaries set
forth on Schedule I hereto.

          "Subsidiary Guaranty" means each senior subordinated guarantee by a
Subsidiary of the Company's obligations under this Indenture and the Notes
pursuant to Article 11 of this Indenture or contained in a Guaranty Agreement.

          "Total Assets" means the total combined, consolidated assets of the
Company and its Restricted Subsidiaries, as would be shown on the Company's
consolidated balance sheet in accordance with GAAP on the date of determination.

          "Transactions" means the acquisition of Skilled Healthcare Group, Inc.
by SHG Acquisition Corp., the Merger, the cash equity contribution relating
thereto, the issuance and sale of the Initial Notes, the execution and delivery
of the Senior Credit Facilities and documents related thereto and the initial
extension of credit thereunder, and other transactions contemplated by the
merger agreement entered into and consummated in connection with such
acquisition and the payment of fees and expenses in connection with the
foregoing.

          "Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.

          "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date.


                                                                              25


          "Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

          "Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.

          "Unrestricted Subsidiary" means with respect to the Company, any
Subsidiary of the Company that is designated by the Board of Directors of the
Company as an Unrestricted Subsidiary pursuant to a Board Resolution, but only
to the extent that such Subsidiary:

          (1) has no Indebtedness other than Non-Recourse Debt;

          (2) has not guaranteed or otherwise directly or indirectly provided
     credit support for any Indebtedness of the Company or any Restricted
     Subsidiary; and

          (3) has no Subsidiaries that are Restricted Subsidiaries.

          Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.04 of this Indenture. On the
Issue Date, Fountain View Reinsurance, Ltd. will be an Unrestricted Subsidiary
without any further action on the part of the Company. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such
date and, if such Indebtedness is not permitted to be incurred as of such date
by Section 4.03 of this Indenture, the Company shall be in default of such
section. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall be permitted only if (1) such Indebtedness
is permitted by Section 4.03 of this Indenture and (2) no Default would be in
existence following such designation.

          "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.

          "Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.



                                                                              26


          "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

          (1) the sum of the products obtained by multiplying: (a) the amount of
     each then remaining installment, sinking fund, serial maturity or other
     required payments of principal, including payment at final maturity, in
     respect thereof, by (b) the number of years (calculated to the nearest
     one-twelfth) that will elapse between such date and the making of such
     payment, by

          (2) the then outstanding principal amount of such Indebtedness.

          "Wholly-Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more other Wholly-Owned Subsidiaries.



                                                                              27


SECTION 1.02. Other Definitions.



                                                                      Defined in
                               Term                                    Section
                               ----                                  -----------
                                                                  
"Affiliate Transaction" ..........................................    4.07(a)
"Asset Sale Offer" ...............................................    4.06(c)
"Blockage Notice" ................................................   10.03
"Change of Control Offer" ........................................    4.10(a)
"Change of Control Payment" ......................................    4.10(a)
"covenant defeasance option" .....................................    8.01(b)
"Custodian" ......................................................    6.01
"Event of Default" ...............................................    6.01
"Guaranteed Obligations" .........................................   11.01
"incur" ..........................................................    4.03(a)
"legal defeasance option" ........................................    8.01(b)
"Offer Amount" ...................................................    4.06(d)(2)
"Offer Period" ...................................................    4.06(d)(2)
"Paying Agent" ...................................................    2.03
"Payment Blockage Period" ........................................   10.03
"Payment Default" ................................................   10.03
"Permitted Debt" .................................................    4.03(b)
"Purchase Date" ..................................................    4.06(d)(1)
"Registrar" ......................................................    2.03
"Restricted Payment ..............................................    4.04(a)


          SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

          "indenture securities" means the Notes and the Subsidiary Guaranties;

          "indenture security holder" means a Noteholder;

          "indenture to be qualified" means this Indenture;

          "indenture trustee" or "institutional trustee" means the Trustee; and

          "obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any successor obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.



                                                                              28


          SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:

          (1) a term has the meaning assigned to it;

          (2) an accounting term not otherwise defined has the meaning assigned
     to it in accordance with GAAP;

          (3) "or" is not exclusive;

          (4) "including" means including without limitation;

          (5) words in the singular include the plural and words in the plural
     include the singular;

          (6) unsecured Indebtedness shall not be deemed to be subordinate or
     junior to secured Indebtedness merely by virtue of its nature as unsecured
     Indebtedness;

          (7) secured Indebtedness shall not be deemed to be subordinate or
     junior to any other secured Indebtedness merely because it has a junior
     priority with respect to the same collateral;

          (8) the principal amount of any noninterest bearing or other discount
     security at any date shall be the principal amount thereof that would be
     shown on a balance sheet of the issuer dated such date prepared in
     accordance with GAAP; and

          (9) all references to the date the Notes were originally issued shall
     refer to the date the Initial Notes were originally issued on the Issue
     Date.



                                                                              29


                                   ARTICLE TWO

                                    The Notes

          SECTION 2.01. Form and Dating. Provisions relating to the Notes are
set forth in the Rule 144A/Regulation S/IAI Appendix attached hereto (the
"Appendix") which is hereby incorporated in, and expressly made part of, this
Indenture. The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in, and expressly made a part of, this Indenture. The Exchange
Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Note shall be dated the date of its authentication. The terms of the Notes
set forth in the Appendix and Exhibit A are part of the terms of this Indenture.

          SECTION 2.02. Execution and Authentication. At least one Officer shall
sign the Notes for the Company by manual or facsimile signature.

          If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.

          A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.

          On the Issue Date, the Trustee shall authenticate and deliver
$200,000,000 million of 11% Senior Subordinated Notes Due 2014 and, at any time
and from time to time thereafter, the Trustee shall authenticate and deliver
Notes for original issue in an aggregate principal amount specified in such
order, in each case upon a written order of the Company signed by at least one
Officer of the Company. Such order shall specify the amount of the Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated and, in the case of an issuance of Additional Notes pursuant to
Section 2.14 after the Issue Date, shall certify that such issuance is in
compliance with Section 4.03.

          The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.



                                                                              30


          SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.

          The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.08. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.

          The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.

          SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Note, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Noteholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Notes and shall notify the Trustee of
any default by the Company in making any such payment. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.

          SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Noteholders. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.

          SECTION 2.06. Transfer and Exchange. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code



                                                                              31


are met. When Notes are presented to the Registrar or a co-registrar with a
request to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met.

          SECTION 2.07. Replacement Notes. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements are met and the
Holder satisfies any other reasonable requirements of the Trustee. If required
by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Note.

          Every replacement Note is an additional Obligation of the Company.

          SECTION 2.08. Outstanding Notes. Notes outstanding at any time are all
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Except as set forth in Section 2.09, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note;
provided, however, that Notes held, directly or indirectly, by the Company or
its Affiliates shall not be deemed outstanding for purposes of the third
paragraph of Section 5 of the Notes.

          If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a protected purchaser (as defined in
Section 8-303 of the Uniform Commercial Code).

          If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Noteholders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) cease to be outstanding and interest on them ceases to
accrue.

          SECTION 2.09. Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company or any Subsidiary Guarantor, or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any Subsidiary Guarantor, will be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
will be so disregarded.



                                                                              32


          SECTION 2.10. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes and deliver them in exchange for temporary
Notes.

          SECTION 2.11. Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Notes to the Company. The
Company may not issue new Notes to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.

          SECTION 2.12. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are Noteholders on
a subsequent special record date. The Company shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail to each Noteholder a notice that states the
special record date, the payment date and the amount of defaulted interest to be
paid.

          SECTION 2.13. CUSIP Numbers, ISINs, etc. The Company in issuing the
Notes may use "CUSIP" numbers, ISINs and "Common Code" numbers (in each case if
then generally in use) and, if so, the Trustee shall use "CUSIP" numbers, ISINs
and "Common Code" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall advise the Trustee in writing of any change in any "CUSIP" numbers, ISINs
or "Common Code" numbers applicable to the Notes.

          SECTION 2.14. Issuance of Additional Notes. After the Issue Date, the
Company shall be entitled, subject to its compliance with Section 4.03, to issue
Additional Notes under this Indenture, which Additional Notes shall have
identical terms as the Initial Notes issued on the Issue Date, other than with
respect to the date of issuance and issue price. All the Notes issued under this
Indenture shall be treated as a single class for all purposes of this Indenture
including waivers, amendments, redemptions and offers to purchase.



                                                                              33


          With respect to any Additional Notes, the Company shall set forth in a
resolution of the Board of Directors and an Officers' Certificate, a copy of
each which shall be delivered to the Trustee, the following information:

          (1) the aggregate principal amount of such Additional Notes to be
     authenticated and delivered pursuant to this Indenture and the provision of
     Section 4.03 that the Company is relying on to issue such Additional Notes;

          (2) the issue price, the issue date and the CUSIP number of such
     Additional Notes; provided, however, that no Additional Notes may be issued
     at a price that would cause such Additional Notes to have "original issue
     discount" within the meaning of Section 1273 of the Code; and

          (3) whether such Additional Notes shall be Initial Notes or shall be
     issued in the form of Exchange Notes as set forth in Exhibit A.



                                                                              34


                                 ARTICLE THREE

                                   Redemption

          SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee in
writing of the redemption date, the principal amount of Notes to be redeemed and
the paragraph of the Notes pursuant to which the redemption will occur.

          The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein.

          SECTION 3.02. Selection of Notes to Be Redeemed. If fewer than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro
rata to the extent practicable. The Trustee shall make the selection from
outstanding Notes not previously called for redemption. The Trustee may select
for redemption portions of the principal of Notes that have denominations larger
than $2,000. Notes and portions of them the Trustee selects shall be in
principal amounts of $2,000 or a whole multiple of $1,000 in excess of $2,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be redeemed.

          SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Notes, the Company shall mail a notice
of redemption by first-class mail to each Holder of Notes to be redeemed at such
Holder's registered address.

          The notice shall identify the Notes to be redeemed and shall state:

          (1) the redemption date;

          (2) the redemption price;

          (3) the name and address of the Paying Agent;

          (4) that Notes called for redemption must be surrendered to the Paying
     Agent to collect the redemption price;

          (5) if fewer than all the outstanding Notes are to be redeemed, the
     identification and principal amounts of the particular Notes to be
     redeemed;

          (6) that, unless the Company defaults in making such redemption
     payment or the Paying Agent is prohibited from making such payment pursuant
     to the



                                                                              35


     terms of this Indenture, interest on Notes (or portion thereof) called for
     redemption ceases to accrue on and after the redemption date;

          (7) the "CUSIP" number, ISIN or "Common Code" number, if any, printed
     on the Notes being redeemed; and

          (8) that no representation is made as to the correctness or accuracy
     of the "CUSIP" number, ISIN, or "Common Code" number, if any, listed in
     such notice or printed on the Notes.

          At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.

          SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
the notice, plus accrued interest to the redemption date (subject to the right
of Holders of record on the relevant record date to receive interest due on the
related interest payment date), and such Notes shall be canceled by the Trustee.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.

          SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date other than Notes or portions of Notes called for
redemption which have been delivered by the Company to the Trustee for
cancellation.

          SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
for the Holder (at the Company's expense) a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.



                                                                              36


                                  ARTICLE FOUR

                                    Covenants

          SECTION 4.01. Payment of Notes. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Noteholders on that date pursuant
to the terms of this Indenture.

          The Company shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

          SECTION 4.02. SEC Reports. So long as any Notes are outstanding, the
Company will (i) furnish to the Holders or cause the Trustee to furnish to the
Holders in each case within the time periods that such information would have
otherwise been required to have been provided to the SEC if the rules and
regulations applicable to the filing of such information were applicable to the
Company and (ii) post on its website within 10 Business Days thereafter:

          (1) all quarterly and annual information that would be required to be
     contained in a filing with the SEC on Forms 10-Q and 10-K if the Company
     were required to file such Forms, including a "Management's Discussion and
     Analysis of Financial Condition and Results of Operations" and, with
     respect to the annual information only, a report on the annual financial
     statements by the Company's certified independent accountants in accordance
     with the professional standards of the American Institute of Certified
     Public Accountants; and

          (2) all current reports that would be required to be filed with the
     SEC on Form 8-K if the Company were required to file such reports.

The availability of the foregoing materials on the SEC's EDGAR service shall be
deemed to satisfy the Company's delivery obligation.

          Following the consummation of the exchange offer or registration of
the Notes contemplated by the Registration Rights Agreement, whether or not
required by the SEC, the Company will file a copy of all the information and
reports referred to in clauses (1) and (2) above with the SEC for public
availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Company has agreed that, for so long as any Notes
remain outstanding, it will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to



                                                                              37


Rule 144A(d) (4) under the Securities Act. The Company will at all times comply
with Trust Indenture Act Section 314(a).

          SECTION 4.03. Limitation on Indebtedness and Issuance of Preferred
Stock. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and the Company will not permit any of its Restricted Subsidiaries to
issue any shares of Preferred Stock; provided, however, that the Company or any
of the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt)
and any of the Subsidiary Guarantors may issue Preferred Stock if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Preferred Stock is issued would have been at least 2.0 to 1.0, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or Preferred
Stock had been issued, as the case may be, at the beginning of such four-quarter
period.

          (b) Paragraph (a) of this Section 4.03 will not prohibit the
incurrence of any or the following items of Indebtedness (collectively,
"Permitted Debt"):

          (1) the incurrence by the Company or any Restricted Subsidiary of
     Indebtedness and reimbursement obligations in respect of letters of credit
     pursuant to the Senior Credit Facilities; provided, however, that the
     aggregate amount of all Indebtedness then classified as having been
     incurred in reliance upon this clause (1) that remains outstanding under
     the Senior Credit Facilities after giving effect to such incurrence does
     not exceed $335 million, less, to the extent a permanent repayment and/or
     commitment reduction is required thereunder as a result of such
     application, the aggregate amount of Net Proceeds applied to repayments
     under the Senior Credit Facilities in accordance with Section 4.06 of this
     Indenture;

          (2) the incurrence by the Company or any Restricted Subsidiary of
     Existing Indebtedness;

          (3) the incurrence by the Company and the Subsidiary Guarantors of
     Indebtedness represented by the Notes originally issued on the Issue Date
     and the related Subsidiary Guaranties, and the Exchange Notes and related
     Subsidiary Guaranties to be issued pursuant to the Registration Rights
     Agreement in respect thereof;

          (4) the incurrence by the Company or any Restricted Subsidiary of
     Indebtedness represented by Capital Lease Obligations, mortgage financings
     or purchase money obligations, in each case incurred for the purpose of
     financing all or any part of the purchase price or cost of construction or
     improvement of property, plant or equipment used or useful in the business
     of the Company or



                                                                              38


     such Restricted Subsidiary (whether through the direct purchase of assets
     or the Capital Stock of any Person owning such assets), and Permitted
     Refinancing Indebtedness in respect thereof, in an aggregate principal
     amount or accreted value, as applicable, not to exceed at any time
     outstanding the greater of $15.0 million and 2.0% of Total Assets at the
     time of any incurrence under this clause (4);

          (5) the incurrence by the Company or any Restricted Subsidiary of
     Indebtedness or Preferred Stock in connection with the acquisition of
     assets or a new Restricted Subsidiary and Permitted Refinancing
     Indebtedness in respect thereof; provided, however, that such Indebtedness
     or Preferred Stock (other than such Permitted Refinancing Indebtedness) was
     incurred by the prior owner of such assets or such Restricted Subsidiary
     prior to such acquisition by the Company or one of its Subsidiaries and was
     not incurred in connection with, or in contemplation of, such acquisition
     by the Company or a Subsidiary of the Company; provided further, however,
     that the principal amount (or accreted value, as applicable) of such
     Indebtedness or Preferred Stock, together with any other outstanding
     Indebtedness and Preferred Stock incurred pursuant to this clause (5), does
     not exceed $25.0 million;

          (6) Indebtedness arising from agreements of the Company or any
     Restricted Subsidiary providing for indemnification, adjustment of purchase
     price or similar obligations, in each case, incurred or assumed in
     connection with the disposition of any business, asset or Subsidiary, other
     than guarantees of Indebtedness incurred by any Person acquiring all or any
     portion of such business, assets or Subsidiary for the purpose of financing
     such acquisition; provided, however, that (a) such Indebtedness is not
     reflected on the balance sheet of the Company or any Restricted Subsidiary
     (contingent obligations referred to in a footnote or footnotes to financial
     statements and not otherwise reflected on the balance sheet will not be
     deemed to be reflected on such balance sheet for purposes of this clause
     (a)) and (b) the maximum assumable liability in respect of such
     Indebtedness shall at no time exceed the gross proceeds including non-cash
     proceeds (the fair market value of such non-cash proceeds being measured at
     the time received and without giving effect to any such subsequent changes
     in value) actually received by the Company or such Restricted Subsidiary in
     connection with such disposition;

          (7) the incurrence by the Company or any Restricted Subsidiary of
     Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
     which are used to refund, refinance, defease or discharge Indebtedness
     incurred pursuant to paragraph (a) of this Section 4.03, clause (2) or (3)
     above, this clause (7) or clause (13) or (16) below;

          (8) the incurrence by the Company or any Restricted Subsidiary of
     intercompany Indebtedness between the Company and any Restricted
     Subsidiary; provided, however, that:



                                                                              39


               (a) if the Company or any Subsidiary Guarantor is the obligor on
          such Indebtedness and the payee is not the Company or a Subsidiary
          Guarantor, such Indebtedness must be expressly subordinated to the
          prior payment in full in cash of all Obligations with respect to the
          Notes, in the case of the Company, or the Subsidiary Guaranty of such
          Subsidiary Guarantor, in the case of a Subsidiary Guarantor; and

               (b) (i) any subsequent issuance or transfer of Equity Interests
          that results in any such Indebtedness being held by a Person other
          than the Company or a Restricted Subsidiary or (ii) any sale or other
          transfer of any such Indebtedness to a Person that is not either the
          Company or a Restricted Subsidiary shall be deemed, in each case, to
          constitute an incurrence of such Indebtedness by the Company or such
          Restricted Subsidiary, as the case may be, not permitted by this
          clause (8);

          (9) the incurrence by the Company or any Restricted Subsidiary of
     Hedging Obligations incurred in the ordinary course of business with a bona
     fide intention to limited interest rate risk or exchange rate risk;

          (10) the guarantee by the Company or a Restricted Subsidiary of
     Indebtedness of the Company or a Restricted Subsidiary that was permitted
     to be incurred by another provision of this Section 4.03;

          (11) the issuance by a Restricted Subsidiary to the Company or any
     Restricted Subsidiary of Preferred Stock; provided, however, that (a) any
     subsequent issuance or transfer of Equity Interests that results in any
     such Preferred Stock being held by a Person other than the Company or a
     Restricted Subsidiary and (b) any sale or other transfer of any such
     Preferred Stock to a Person that is neither the Company nor a Restricted
     Subsidiary shall be deemed, in each case, to constitute an issuance of such
     Preferred Stock by such Restricted Subsidiary that is not permitted by this
     clause (11);

          (12) the incurrence by the Company or any Restricted Subsidiary in
     respect of workers' compensation claims, self-insurance obligations,
     indemnities, bankers' acceptances, performance, completion and surety bonds
     or guarantees, and similar types of obligations in the ordinary course of
     business;

          (13) the incurrence by the Company or any Subsidiary Guarantor of
     Indebtedness or Preferred Stock in connection with the acquisition of
     assets or a Person; provided, however, that, after giving effect to such
     acquisition, the Company could incur an additional dollar of Indebtedness
     pursuant to paragraph (a) of this Section 4.03 or the Fixed Charge Coverage
     Ratio would be greater than immediately prior to such acquisition;

          (14) the incurrence by the Company or any Restricted Subsidiary of
     Indebtedness arising from the honoring by a bank or other financial
     institution of



                                                                              40


     a check, draft or similar instrument inadvertently drawn against
     insufficient funds, so long as such Indebtedness is covered within five
     Business Days;

          (15) the incurrence by a Restricted Subsidiary that is a bona fide
     joint venture between the Company and a third party, where the third party
     is not a Subsidiary of the Company and owns at least 20% of the economic
     interest of the Restricted Subsidiary, of Indebtedness or Preferred Stock;
     provided, however, that the principal amount (or accreted value, as
     applicable) of such Indebtedness or Preferred Stock, together with any
     other outstanding Indebtedness and Preferred Stock incurred pursuant to
     this clause (15), does not exceed $30.0 million;

          (16) the incurrence of Indebtedness of the Company and Indebtedness or
     Preferred Stock of any Subsidiary Guarantor equal to 100% of the net cash
     proceeds received by the Company after the Issue Date from the sale of
     Qualified Equity Interests of the Company or, to the extent contributed to
     the common equity capital of the Company, Equity Interests of any of the
     Company's direct or indirect parent entities (in each case, other than
     proceeds of sales of Equity Interests to any Subsidiary of the Company) to
     the extent such net cash proceeds have not otherwise been and are not
     thereafter applied to permit the payment of any Restricted Payment; and

          (17) the incurrence by the Company or any Subsidiary Guarantor of
     additional Indebtedness, in an aggregate principal amount (or accreted
     value, as applicable) at any time outstanding, not to exceed $25.0 million.

For purposes of determining compliance with this Section 4.03, in the event that
an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (17) above or is
entitled to be incurred pursuant to paragraph (a) of this Section 4.03, the
Company will be permitted to classify such item of Indebtedness in any manner
that complies with this Section 4.03 (except that Indebtedness incurred under
the Senior Credit Facilities on the Issue Date shall be deemed to have been
incurred pursuant to clause (1) above). In addition, the Company may, at any
time, change the classification of an item of Indebtedness or any portion
thereof (except for Indebtedness incurred under clause (1) above) to any other
clause or to the first paragraph hereof; provided, however, that the Company
would be permitted to incur such item of Indebtedness (or portion thereof)
pursuant to such other clause or the first paragraph hereof, as the case may be,
at such time of reclassification. The accrual of interest, the accrual of
dividends, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the reclassification of preferred stock as Indebtedness due to a
change in accounting principles, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
shall not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section 4.03. Notwithstanding any other
provision of this Section 4.03, the maximum amount of Indebtedness that the
Company or any Restricted Subsidiary may incur pursuant to this Section 4.03
shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates or currency values.



                                                                              41


          SECTION 4.04. Limitation on Restricted Payments. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:

          (1) declare or pay any dividend or make any other payment or
     distribution on account of the Company's or any of its Restricted
     Subsidiary's Equity Interests (including any payment on such Equity
     Interests in connection with any merger or consolidation involving the
     Company) or to the direct or indirect holders of the Company's or any of
     its Restricted Subsidiary's Equity Interests in their capacity as such
     other than dividends or distributions payable in Qualified Equity Interests
     and other than dividend or distributions payable to the Company or a
     Restricted Subsidiary;

          (2) purchase, redeem or otherwise acquire or retire for value
     (including, in connection with any merger or consolidation involving the
     Company) any Equity Interests of the Company or any direct or indirect
     parent of the Company;

          (3) make any payment on or with respect to, or purchase, redeem,
     defease or otherwise acquire or retire for value any Indebtedness of the
     Company or a Subsidiary Guarantor that is contractually subordinated to the
     Notes or the Subsidiary Guaranties, except (i) payments of interest or
     principal at Stated Maturity thereof, (ii) payments of interest or
     principal on or in respect of Indebtedness owed to and held by the Company
     or any Restricted Subsidiary and (iii) payments, purchases, redemptions,
     defeasances or other acquisitions or retirements for value in anticipation
     of satisfying a scheduled maturity, sinking fund or amortization or other
     installment obligation or mandatory redemption, in each case, due within
     one year of the Stated Maturity thereof; or

          (4) make any Restricted Investment;

(all such payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as "Restricted Payments");

unless, at the time of and after giving effect to such Restricted Payment:

          (1) no Default shall have occurred and be continuing or would occur as
     a consequence thereof;

          (2) the Company would, after giving pro forma effect thereto as if
     such Restricted Payment had been made at the beginning of the applicable
     four-quarter period, have been permitted to incur at least $1.00 of
     additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
     set forth in Section 4.03(a) of this Indenture; and

          (3) such Restricted Payment, together with the aggregate amount of all
     other Restricted Payments made by the Company and its Restricted
     Subsidiaries after the Issue Date (excluding Restricted Payments permitted
     by clauses (2), (3), (4), (6), (7), (8), (9), (10) and (11) of paragraph
     (b) of this Section 4.04), is not greater than the sum, without
     duplication, of:



                                                                              42


               (a) 50% of the combined Consolidated Net Income of the Company
          for the period (taken as one accounting period) from the beginning of
          the fiscal quarter in which the Issue Date occurs to the end of the
          Company's most recently ended fiscal quarter for which internal
          financial statements are available at the time of such Restricted
          Payment (or, if such Consolidated Net Income for such period is a
          deficit, less 100% of such deficit); plus

               (b) 100% of the aggregate net proceeds received by the Company
          after the Issue Date as a contribution to its common equity capital or
          received by the Company from the issue or sale after the Issue Date
          (other than to a Subsidiary of the Company) of Qualified Equity
          Interests or of Disqualified Stock or debt securities of the Company
          that have been converted into or exchanged for such Qualified Equity
          Interests (but excluding any such net proceeds applied to permit the
          incurrence of any Contribution Indebtedness); plus

               (c) 100% of the net proceeds received by the Company by means of
          (i) the sale or other disposition (other than to the Company or a
          Restricted Subsidiary) of Restricted Investments made by the Company
          and its Restricted Subsidiaries and repurchases and redemptions of
          such Restricted Investments from the Company and its Restricted
          Subsidiaries and repayments of loans or advances which constitute
          Restricted Investments by the Company and its Restricted Subsidiaries
          or (ii) the sale (other than to the Company or a Restricted
          Subsidiary) of the stock of an Unrestricted Subsidiary; plus

               (d) if any Unrestricted Subsidiary (i) is redesignated as a
          Restricted Subsidiary, the fair market value of such redesignated
          Unrestricted Subsidiary (as certified to the Trustee in an Officers'
          Certificate) as of the date of its redesignation or (ii) pays any cash
          dividends or cash distributions to the Company or any Restricted
          Subsidiary, 100% of any such dividends or distributions made after the
          Issue Date.

          (b) The preceding provisions will not prohibit:

          (1) the payment of any dividend within 60 days after the date of
     declaration thereof, if at such date of declaration such payment would have
     complied with the provisions of this Indenture;

          (2) the making of any Restricted Payment in exchange for, or out of
     the net cash proceeds of the substantially concurrent sale or issuance
     (other than to a Subsidiary of the Company) of, Qualified Equity Interests
     or from the substantially concurrent contribution to the common equity
     capital of the Company (but excluding any such net proceeds applied to
     permit the incurrence of any Contribution Indebtedness); provided, however,
     that the amount of any



                                                                              43


     such net cash proceeds that are utilized for any such Restricted Payment
     shall be excluded from clause (3)(b) of paragraph (a) of this Section 4.04
     and shall not be applied to permit the payment of any other Restricted
     Payment;

          (3) the defeasance, redemption, repurchase, repayment or other
     acquisition of subordinated Indebtedness of the Company or any Restricted
     Subsidiaries with the net cash proceeds from an incurrence of Permitted
     Refinancing Indebtedness;

          (4) the payment of any dividend (or in the case of any partnership or
     limited liability company, any similar distribution) by a Restricted
     Subsidiary to the holders of its Equity Interests on a pro rata basis,
     taking into account the relative preferences, if any, of the various
     classes of equity interests in such Restricted Subsidiary;

          (5) the repurchase, redemption or other acquisition or retirement for
     value (or the distribution of amounts to any other direct or indirect
     parent of the Company to fund any such repurchase, redemption or other
     acquisition or retirement) of any Equity Interests of the Company or any
     direct or indirect parent of the Company held by any current or former
     officer, director, consultant or employee of the Company or any Restricted
     Subsidiary (or any permitted transferees, assigns, estates or heirs of any
     of the foregoing); provided, however, the aggregate amount paid by the
     Company and its Restricted Subsidiaries pursuant to this clause (5) shall
     not exceed $2.5 million in any calendar year (excluding for purposes of
     calculating such amount the amount paid for Equity Interests repurchased,
     redeemed, acquired or retired with the proceeds from the repayment of
     outstanding loans previously made by the Company or a Restricted Subsidiary
     for the purpose of financing the acquisition of such Equity Interests),
     with unused amounts in any calendar year being carried over for one
     additional calendar year; provided further, however, that such amount in
     any calendar year may be increased by an amount not to exceed:

               (A) the net cash proceeds from the sale of Qualified Equity
          Interests of the Company and, to the extent contributed to the common
          equity capital of the Company, Equity Interests of any of the
          Company's direct or indirect parent entities (but excluding any such
          net proceeds applied to permit the incurrence of any Contribution
          Indebtedness), in each case to members of management, directors or
          consultants of the Company, any of its Subsidiaries or any of its
          direct or indirect parent corporations that occurs after the Issue
          Date, to the extent such cash proceeds have not otherwise been and are
          not thereafter applied to permit the payment of any other Restricted
          Payment; plus

               (B) the cash proceeds of key man life insurance policies received
          by the Company and its Restricted Subsidiaries after the Issue Date;
          less

               (C) the amount of any Restricted Payments previously made
          pursuant to clauses (A) and (B) of this clause (5);



                                                                              44


     provided further, however, that cancellation of Indebtedness owing to the
     Company from members of management of the Company, any of its direct or
     indirect parent corporations or any Restricted Subsidiary in connection
     with a repurchase of Equity Interests of the Company or any of its direct
     or indirect parent corporations will not be deemed to constitute a
     Restricted Payment for purposes of this Indenture;

          (6) the declaration and payment of dividends on Disqualified Stock in
     accordance with the certificate of designations therefor; provided,
     however, that such issuance of Disqualified Stock is permitted by Section
     4.03 of this Indenture;

          (7) repurchases of Equity Interests deemed to occur upon the exercise
     of stock options to the extent that such Equity Interests represent a
     portion of the exercise price thereof;

          (8) payments permitted under clauses (7), (8) and (9) of Section 4.07
     of this Indenture;

          (9) payments made to purchase, redeem, defease or otherwise acquire or
     retire for value any Equity Interests of the Company or any Restricted
     Subsidiary or any Subordinated Obligation of the Company or a Subsidiary
     Guarantor (other than Equity Interests or subordinated Indebtedness issued
     to or at any time held by an Affiliate of any such Person), in each case,
     pursuant to provisions requiring such Person to offer to purchase, redeem,
     defease or otherwise acquire or retire for value such Equity Interests or
     subordinated Indebtedness upon the occurrence of a Change of Control or
     with the proceeds of Asset Sales as defined in the charter provisions,
     agreements or instruments governing such Equity Interests or subordinated
     Indebtedness; provided, however, that a Change of Control Offer or Asset
     Sale Offer, as applicable, has been made and the Company has purchased all
     Notes validly tendered in connection with that Change of Control Offer or
     Asset Sale Offer;

          (10) the declaration and payment of dividends on the Company's common
     stock (or the payment of dividends to any direct or indirect parent entity
     to fund a payment of dividends on such entity's common stock), following
     the first Public Equity Offering of the Company's common stock or the
     common stock of any of its direct or indirect parent entities after the
     Issue Date, of up to 6% per annum of the net cash proceeds received by the
     Company therefrom and, in the case of an offering of such parent entity,
     contributed to the Company's common equity capital; and

          (11) other Restricted Payments in an aggregate amount up to $15.0
     million;

provided, however, that, in the case of clause (9), no Default shall have
occurred and be continuing or would occur as a consequence of the making of the
Restricted Payment contemplated thereby.


                                                                              45


          (c) The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.

          SECTION 4.05. Dividend and Other Payment Restrictions. (a) The Company
will not, and will not permit its Restricted Subsidiaries to, directly or
indirectly, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to:

          (1) pay dividends or make any other distributions to the Company or
     any Restricted Subsidiary (i) on its Capital Stock or (ii) with respect to
     any other interest or participation in, or measured by, its profits;

          (2) pay any Indebtedness owed to the Company or any Restricted
     Subsidiary;

          (3) make loans or advances to the Company or any Restricted
     Subsidiary; or

          (4) transfer any of its properties or assets to the Company or any
     Restricted Subsidiary.

          (b) However, the preceding restrictions will not apply to encumbrances
or restrictions existing under or by reason of:

          (1) Existing Indebtedness and the Senior Credit Facilities as in
     effect as of the Issue Date, and any amendments, modifications,
     restatements, renewals, increases, supplements, refundings, replacements or
     refinancings, of any thereof; provided, however, that such amendments,
     modifications, restatements, renewals, increases, supplements, refundings,
     replacements or refinancings are not, taken as a whole, materially more
     restrictive with respect to such dividend and other payment restrictions
     than those contained in those agreements as in effect on the Issue Date;

          (2) this Indenture, the Notes, the Subsidiary Guaranties, the Exchange
     Notes or the Registration Rights Agreement;

          (3) any applicable law, rule, regulation or order;

          (4) any instrument or agreement of a Person acquired by the Company or
     any Restricted Subsidiary as in effect at the time of such acquisition
     (except to the extent incurred in connection with or in contemplation of
     such acquisition), which encumbrance or restriction is not applicable to
     any Person, or the properties or assets of any Person, other than the
     Person, or the property or assets of the Person, so acquired; provided,
     however, that, in the case of Indebtedness, such Indebtedness was permitted
     by the terms of this Indenture to be incurred;



                                                                              46


          (5) customary non-assignment provisions in contracts and licenses
     entered into in the ordinary course of business;

          (6) purchase money obligations for property acquired in the ordinary
     course of business and Capital Lease Obligations that impose restrictions
     on the property so acquired or leased of the nature described in clause (4)
     of paragraph (a) of this Section 4.05;

          (7) secured Indebtedness otherwise permitted under this Indenture, the
     terms of which limit the right of the debtor to dispose of the assets
     securing such Indebtedness;

          (8) Permitted Refinancing Indebtedness; provided, however, that the
     material restrictions contained in the agreements governing such Permitted
     Refinancing Indebtedness are not, taken as a whole, materially more
     restrictive with respect to such dividend and other payment restrictions
     than those contained in the agreements governing the Indebtedness being
     Refinanced;

          (9) any agreement for the sale or other disposition of a Restricted
     Subsidiary or an asset that restricts distributions by such Restricted
     Subsidiary or transfers of such asset pending the sale or other
     disposition;

          (10) Liens permitted to be incurred by Section 4.11 of this Indenture
     that limit the right of the debtor to dispose of the assets subject to such
     Liens;

          (11) provisions limiting the disposition, dividend or distribution of
     assets or property in joint venture agreements, partnership agreements,
     limited liability company operating agreements, asset sale agreements,
     sale-leaseback agreements, stock or equity sale agreements and other
     similar agreements, which limitation is applicable only to the assets or
     property that are the subject of such agreements; and

          (12) restrictions on cash or other deposits or net worth imposed by
     customers under contracts entered into in the ordinary course of business.

          SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:

          (1) the Company (or such Restricted Subsidiary, as the case may be)
     receives consideration at the time of such Asset Sale at least equal to the
     fair market value of the assets or Equity Interests issued or sold or
     otherwise disposed of; and

          (2) at least 75% of the consideration received therefor by the Company
     (or such Restricted Subsidiary, as the case may be) is in the form of cash
     or Cash Equivalents.



                                                                              47


For purposes of this provision, each of the following shall be deemed to be
cash:

               (A) any liabilities of the Company or any Restricted Subsidiary
          (as shown on the most recent consolidated balance sheet of the Company
          and its Restricted Subsidiaries other than contingent liabilities and
          liabilities that are by their terms subordinated to the Notes or any
          Subsidiary Guaranty) that are assumed by the transferee of any such
          assets pursuant to an agreement that releases the Company or any such
          Restricted Subsidiary from further liability with respect to such
          liabilities;

               (B) any securities, notes or other obligations received by the
          Company or any such Restricted Subsidiary from such transferee that
          are converted by the Company or such Restricted Subsidiary into cash
          or Cash Equivalents within 180 days (to the extent of the cash or Cash
          Equivalents received in that conversion);

               (C) any stock or assets of the kind referred to in clause (2) or
          (4) of paragraph (b) of this Section 4.06; and

               (D) any Designated Non-cash Consideration received by the Company
          or any Restricted Subsidiary in such Asset Sale having an aggregate
          fair market value, taken together with all other Designated Non-cash
          Consideration received pursuant to this clause (D) that is at that
          time outstanding, not to exceed $15 million at the time of receipt of
          such Designated Non-cash Consideration, with the fair market value of
          each item of Designated Non-cash Consideration being measured at the
          time received and without giving effect to subsequent changes in
          value.

          (b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any such Restricted Subsidiary may apply such Net
Proceeds, at its option:

          (1) to repay or repurchase Senior Indebtedness of the Company or any
     Subsidiary Guarantor or any Indebtedness of any Restricted Subsidiary that
     is not a Subsidiary Guarantor;

          (2) to make an Investment in (provided such Investment is in the form
     of Capital Stock), or to acquire all or substantially all of the assets of,
     a Person engaged in a Permitted Business if such Person is, or will become
     as a result thereof, a Restricted Subsidiary;

          (3) to make a capital expenditure; or

          (4) to acquire long lived assets (other than securities) to be used in
     a Permitted Business.



                                                                              48


Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Senior Credit Facilities
or otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture.

          (c) Any Net Proceeds from Asset Sales that are not applied or invested
as provided in paragraph (b) or this Section 4.06 will constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to purchase from all Holders (an
"Asset Sale Offer") and, if applicable, redeem or purchase (or make an offer to
do so) any other Senior Subordinated Indebtedness of the Company, the provisions
of which require the Company to redeem or purchase (or make an offer to do so)
such Indebtedness with the proceeds from any Asset Sales, the maximum aggregate
principal amount of Notes and such other Senior Subordinated Indebtedness that
may be purchased (on a pro rata basis) with such Excess Proceeds. The offer
price for the Notes in any Asset Sale Offer will be equal to 100% of principal
amount plus accrued and unpaid interest, if any, to the date of purchase, and
will be payable in cash and the redemption or purchase price for such other
Senior Subordinated Indebtedness shall be as set forth in the related
documentation governing such Indebtedness. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not prohibited by the Indenture. If the aggregate purchase price
of the Notes and the other Senior Subordinated Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Company shall select
the Notes to be purchased on a pro rata basis but in round denominations, which
in the case of the Notes will be denominations of $2,000 initial principal
amount and multiples of $1,000 thereafter. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds related to such Asset Sale Offer shall be
reset at zero.

          (d)(1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Asset Sale Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Notes purchased by the Company either in
whole or in part (subject to prorating as described in paragraph (c) of this
Section 4.06 in the event the Asset Sale Offer is oversubscribed) in a minimum
amount of $2,000 or in larger integral multiples of $1,000 of principal amount,
at the applicable purchase price. The notice shall specify a purchase date not
less than 30 days nor more than 60 days after the date of such notice (the
"Purchase Date") and shall contain such information concerning the business of
the Company which the Company in good faith believes will enable such Holders to
make an informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly Report
on Form 10-Q and any Current Report on Form 8-K of the Company filed subsequent
to such Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials (or corresponding successor
reports), (B) a description of material developments in the Company's business
subsequent to the date of the latest of such Reports, and (C) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Notes



                                                                              49


pursuant to the Asset Sale Offer, together with the information contained in
clause (3).

          (2) Not later than the date upon which written notice of an Asset Sale
     Offer is delivered to the Trustee as provided above, the Company shall
     deliver to the Trustee an Officers' Certificate as to (A) the amount of the
     Asset Sale Offer (the "Offer Amount"), including information as to any
     other Senior Subordinated Indebtedness included in the Asset Sale Offer,
     (B) the allocation of the Net Available Cash from the Asset Sale pursuant
     to which such Asset Sale Offer is being made and (C) the compliance of such
     allocation with the provisions of this Section 4.06. On such date, the
     Company shall also irrevocably deposit with the Trustee or with a Paying
     Agent (or, if the Company is acting as its own Paying Agent, segregate and
     hold in trust) in Cash Equivalents, maturing on the last day prior to the
     Purchase Date or on the Purchase Date if funds are immediately available by
     open of business, an amount equal to the Offer Amount to be held for
     payment in accordance with the provisions of this Section. If the Asset
     Sale Offer includes other Senior Subordinated Indebtedness, the deposit
     described in the preceding sentence may be made with any other paying agent
     pursuant to arrangements satisfactory to the Trustee. Upon the expiration
     of the period for which the Asset Sale Offer remains open (the "Offer
     Period"), the Company shall deliver to the Trustee for cancellation the
     Notes or portions thereof which have been properly tendered to and are to
     be accepted by the Company. The Trustee shall, on the Purchase Date, mail
     or deliver payment (or cause the delivery of payment) to each tendering
     Holder in the amount of the purchase price. In the event that the aggregate
     purchase price of the Notes delivered by the Company to the Trustee is less
     than the Offer Amount applicable to the Notes, the Trustee shall deliver
     the excess to the Company immediately after the expiration of the Offer
     Period for application in accordance with this Section 4.06.

          (3) Holders electing to have a Note purchased shall be required to
     surrender the Note, with an appropriate form duly completed, to the Company
     at the address specified in the notice at least three Business Days prior
     to the Purchase Date. Holders shall be entitled to withdraw their election
     if the Trustee or the Company receives not later than one Business Day
     prior to the Purchase Date, a telex, facsimile transmission or letter
     setting forth the name of the Holder, the principal amount of the Note
     which was delivered for purchase by the Holder and a statement that such
     Holder is withdrawing his election to have such Note purchased. Holders
     whose Notes are purchased only in part shall be issued new Notes equal in
     principal amount to the unpurchased portion of the Notes surrendered.

          (4) At the time the Company delivers Notes to the Trustee which are to
     be accepted for purchase, the Company shall also deliver an Officers'
     Certificate stating that such Notes are to be accepted by the Company
     pursuant to and in accordance with the terms of this Section. A Note shall
     be deemed to have been accepted for purchase at the time the Trustee,
     directly or through an agent, mails or delivers payment therefor to the
     surrendering Holder.



                                                                              50


          (e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.

          SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any of its Affiliates (each,
an "Affiliate Transaction"), unless:

          (1) such Affiliate Transaction is on terms that are not materially
     less favorable to the Company or such Restricted Subsidiary than those that
     would have been obtained in a comparable transaction by the Company or such
     Restricted Subsidiary with an unrelated Person; and

          (2) the Company delivers to the Trustee:

               (a) with respect to any Affiliate Transaction or series of
          related Affiliate Transactions involving aggregate consideration in
          excess of $5.0 million, a resolution of the Board of Directors of the
          Company and an Officers' Certificate certifying that such Affiliate
          Transaction complies with clause (1) above and that such Affiliate
          Transaction has been approved by a majority of the disinterested
          members of such Board of Directors; and

               (b) with respect to any Affiliate Transaction or series of
          related Affiliate Transactions involving aggregate consideration in
          excess of $25.0 million, an opinion as to the fairness to the Holders
          of such Affiliate Transaction from a financial point of view issued by
          an accounting, appraisal or investment banking firm of national
          standing.

          (b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of paragraph
(a) of this Section 4.07:

          (1) transactions between or among the Company and its Restricted
     Subsidiaries;

          (2) any Restricted Payment that is permitted by Section 4.04 of this
     Indenture;

          (3) reasonable loans, advances, fees, benefits and compensation paid
     or provided to, and indemnity provided on behalf of, officers, directors,
     employees or consultants of the Company or any Restricted Subsidiary;



                                                                              51


          (4) transactions pursuant to any contract or agreement in effect on
     the Issue Date as the same may be amended, modified or replaced from time
     to time so long as any such amendment, modification or replacement, taken
     as a whole, is no less favorable in any material respect to the Company or
     such Restricted Subsidiary than the contract or agreement as in effect on
     the Issue Date;

          (5) transactions with a Person (other than an Unrestricted Subsidiary)
     that is an Affiliate of the Company solely because the Company owns,
     directly or through a Restricted Subsidiary, an Equity Interest in, or
     controls, such Person;

          (6) the issuance or sale of Qualified Equity Interests (and the
     exercise of any warrants, options or other rights to acquire Qualified
     Equity Interests);

          (7) to the extent that the Company and one or more of its Restricted
     Subsidiaries are members of a consolidated, combined or similar income tax
     group of which a direct or indirect parent of the Company is the common
     parent, payment of dividends or other distributions by the Company or one
     or more of its Restricted Subsidiaries pursuant to a tax sharing agreement
     or otherwise to the extent necessary to pay, and that are used to pay, any
     income taxes of such tax group that are attributable to the Company and its
     Restricted Subsidiaries and are not payable directly by the Company or any
     of its Restricted Subsidiaries; provided, however, that the amount of any
     such dividends or distributions (plus any such taxes payable directly by
     the Company and its Restricted Subsidiaries) shall not exceed the amount of
     such taxes that would have been payable directly by the Company and its
     Restricted Subsidiaries had the Company been the U.S. common parent of a
     separate tax group that included only the Company and its Restricted
     Subsidiaries;

          (8)(a) the payment of fees to Sponsor pursuant to the Management
     Agreement not to exceed $500,000 (plus any amounts accrued pursuant to the
     following proviso) in any fiscal year of the Company; provided, however,
     that such payments may accrue but may not be paid during the existence of
     an Event of Default arising from clause (1), (2), (7) or (8) of Section
     6.01(a) of this Indenture; and (b) payments by the Company to or on behalf
     of the direct or indirect parent of the Company in an amount sufficient to
     pay out-of-pocket legal, accounting and filing and other general corporate
     overhead costs of such parent, customary salary, bonus and other benefits
     payable to officers and employees of a director or indirect parent of the
     Company and franchise taxes and other fees required to maintain its
     existence, actually incurred by such parent; provided, however, that such
     costs, salaries, bonuses, benefits, taxes and fees are attributable to the
     ownership of the Company and its Restricted Subsidiaries;

          (9) reimbursements of bona fide out-of-pocket expenses of Sponsor
     incurred in connection with the general administration and management of
     SHG Holdings Solutions, Inc., the Company and any Restricted Subsidiaries
     of the Company; provided, however, that, in the case of SHG Holdings
     Solutions, Inc, such expenses are attributable to the ownership of the
     Company and its Restricted



                                                                              52


     Subsidiaries or consist of expenses related to becoming or maintaining its
     status as a public company;

          (10) loans or advances to employees of the Company or any Restricted
     Subsidiary (x) in the ordinary course of business or (y) in connection with
     the purchase by such Persons of Equity Interests of any direct or indirect
     parent of the Company so long as the cash proceeds of such purchase
     received by such direct or indirect parent are contemporaneously
     contributed to the common equity capital of the Company;

          (11) transactions and any series of transactions with an Insurance
     Subsidiary that is an Unrestricted Subsidiary in the ordinary course of
     business that otherwise have been approved by the Board of Directors of the
     Company and are consistent with clause (1) of paragraph (a) of this Section
     4.07;

          (12) management, practice support and similar agreements with Related
     Professional Corporations entered into in the ordinary course of business
     and transactions pursuant thereto; and

          (13) transactions with customers, clients, suppliers or purchasers or
     sellers of goods or services, in each case in the ordinary course of
     business and otherwise in compliance with the terms of this Indenture that
     are on terms no less favorable than those that would have been obtained in
     a comparable transaction with an unrelated party or on terms that are
     approved by the Board of Directors of the Company, including a majority of
     the disinterested directors.

          SECTION 4.08. Limitation on Line of Business. The Company will not,
and will not permit any Restricted Subsidiary to, engage in any business other
than a Permitted Business, except to such extent as would not be material to the
Company and their Restricted Subsidiaries taken as a whole.

          SECTION 4.09. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a Default and
the conditions set forth in the definition of "Unrestricted Subsidiary" are met.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash or Cash Equivalents) in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments
pursuant to Section 4.04 of this Indenture or under one or more of the clauses
of the definition of Permitted Investments, as determined by the Company. All
such outstanding Investments will be valued at their fair market value at the
time of such designation, as certified to the Trustee in an Officers'
Certificate. That designation will only be permitted if such Restricted Payment
would be permitted at that time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary.



                                                                              53


          SECTION 4.10. Change of Control. (a) If a Change of Control occurs,
each Holder will have the right to require the Company to repurchase all or any
part (in a minimum amount of $2,000 and $1,000 integral multiples thereof) of
that Holder's Notes pursuant to the Change of Control Offer (as defined below).
In the Change of Control Offer, the Company will offer a payment in cash equal
to 101% of the aggregate principal amount of Notes repurchased plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Change of Control
Payment"). Within 60 days following any Change of Control, the Company will mail
a notice (the "Change of Control Offer") to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on a date (the "Change of Control Payment Date") no earlier
than 30 days and no later than 60 days from the date the notice is mailed, other
than as may be required by law, pursuant to the procedures required by this
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Indenture relating to such
Change of Control Offer, the Company will comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
described in this Indenture by virtue thereof.

          (b) On the Change of Control Payment Date, the Company will, to the
extent lawful:

          (1) accept for payment all Notes or portions thereof in minimum
     amounts equal to $2,000 or an integral multiple of $1,000 in excess thereof
     properly tendered pursuant to the Change of Control Offer;

          (2) deposit with the Paying Agent an amount equal to the Change of
     Control Payment in respect of all Notes or portions thereof so tendered;
     and

          (3) deliver or cause to be delivered to the Trustee the Notes so
     accepted together with an Officers' Certificate stating the aggregate
     principal amount of Notes or portions thereof being purchased by the
     Company.

          (c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased.

          (d) The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new



                                                                              54


Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, however, that each such new Note will be in a
principal amount of $2,000 or any greater amount in multiples of $1,000.

          (e) Notwithstanding the foregoing provisions of this Section 4.10, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer or if notice of redemption has been given pursuant to Section 3.03
of this Indenture.

          (f) If making a Change Of Control Payment would violate any
outstanding Senior Indebtedness of the Company, prior to complying with any of
the provisions of this Section 4.10, but in any event within 90 days following a
Change of Control, the Company will either repay such Senior Indebtedness or
obtain the requisite consents under the agreements governing such Senior
Indebtedness to permit the repurchase of Notes required by this Section 4.10.
The Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date

          SECTION 4.11. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind (other than Permitted
Liens) securing Indebtedness upon any of their property or assets, now owned or
hereafter acquired unless:

          (1) in the case of Liens securing Indebtedness that is expressly
     subordinated or junior in right of payment to the Notes, the Notes are
     secured on a senior basis to the obligations so secured until such time as
     such obligations are no longer secured by a Lien; and

          (2) in all other cases, the Notes are secured on an equal and ratable
     basis with the obligations so secured until such time as such obligations
     are no longer secured by a Lien.

          SECTION 4.12. Limitation on Other Senior Subordinated Indebtedness.
The Company will not, and will not permit its Restricted Subsidiaries to, incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is both:

          (1) subordinate in right of payment to any Senior Indebtedness; and

          (2) senior in right of payment to the Notes or any Subsidiary
     Guaranty.

          Neither the existence nor lack of a security interest nor the priority
of any such security interest shall be deemed to affect the ranking or right of
payment of any Indebtedness.



                                                                              55


          SECTION 4.13. Future Guaranties. The Company will not permit any
Domestic Restricted Subsidiary, directly or indirectly, to incur Indebtedness,
or guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company or any Restricted Subsidiary, unless:

          (1) such Indebtedness is incurred by such Restricted Subsidiary
     pursuant to clause (2), (4), (5), (6), (7) (with respect to Permitted
     Refinancing Indebtedness in respect of Indebtedness initially incurred
     under clause (2) or (4) only), (8), (11), (12), (14) or (15) of Section
     4.03(b) of this Indenture or pursuant to clause (10) of such Section
     4.03(b) (with respect to Indebtedness incurred under any of the foregoing
     clauses);

          (2) such Restricted Subsidiary is a Subsidiary Guarantor; or

          (3) such Restricted Subsidiary simultaneously executes and delivers a
     Guaranty Agreement and becomes a Subsidiary Guarantor, which guarantee
     shall (a) with respect to any guarantee of Senior Indebtedness, be
     subordinated in right of payment on the same terms as the Notes are
     subordinated to such Senior Indebtedness and (b) with respect to any
     guarantee of any other Indebtedness, be senior to or pari passu with such
     Restricted Subsidiary's other Indebtedness or guarantee of or pledge to
     secure such other Indebtedness.

          SECTION 4.14. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto.



                                                                              56


                                  ARTICLE FIVE

                                Successor Company

          SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company may not (other than pursuant to the Merger): (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person unless:

          (1) either (a) the Company is the surviving corporation or (b) the
     Person formed by or surviving any such consolidation or merger (if other
     than the Company) or to which such sale, assignment, transfer, conveyance
     or other disposition shall have been made is a corporation, limited
     liability company or partnership organized or existing under the laws of
     the United States, any State thereof or the District of Columbia; provided,
     however, that if such Person is a limited liability company or partnership,
     a corporate Wholly-Owned Subsidiary of such Person organized under the laws
     of the United States, any state thereof or the District of Columbia becomes
     a co-issuer of the Notes in connection therewith;

          (2) the entity or Person formed by or surviving any such consolidation
     or merger (if other than the Company) or the entity or Person to which such
     sale, assignment, transfer, conveyance or other disposition shall have been
     made assumes all the obligations of the Company under the Notes and this
     Indenture pursuant to a supplemental indenture in a form reasonably
     satisfactory to the Trustee;

          (3) immediately after such transaction no Default exists;

          (4)(a) the Company or the entity or Person formed by or surviving any
     such consolidation or merger (if other than the Company), or to which such
     sale, assignment, transfer, conveyance or other disposition shall have been
     made will, after giving pro forma effect thereto as if such transaction had
     occurred at the beginning of the applicable four-quarter period, be
     permitted to incur at least $1.00 of additional Indebtedness pursuant to
     the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) of this
     Indenture or (b) the Fixed Charge Coverage Ratio of the Company or the
     Person formed by or surviving any such consolidation, amalgamation or
     merger (if other than the Company), or to which such sale, assignment,
     transfer, conveyance or other disposition has been made, after giving
     effect to the transaction and any related financings, would not be less
     than the Fixed Charge Coverage Ratio of the Company immediately prior to
     such transaction; and

          (5) the Company shall have delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation,



                                                                              57


     merger or transfer and such supplemental indenture (if any) comply with
     this Indenture.

The preceding clause (4) will not prohibit:

               (a) a merger between the Company and a Restricted Subsidiary or
          between Restricted Subsidiaries; or

               (b) a merger between the Company and an Affiliate incorporated
          solely for the purpose of reincorporating the Company in another state
          of the United States.

In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not be applicable to a
sale, assignment, transfer, conveyance or other disposition of assets between or
among the Company and any of its Restricted Subsidiaries.

          (b) The Company will not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:

          (1) except in the case of a Subsidiary Guarantor (x) that has been
     disposed of in its entirety to another Person (other than to the Company or
     an Affiliate of the Company), whether through a merger, consolidation or
     sale of Capital Stock or assets or (y) that, as a result of the disposition
     of all or a portion of its Capital Stock, ceases to be a Subsidiary, in
     both cases, if in connection therewith the Company provides an Officers'
     Certificate to the Trustee to the effect that the Company will comply with
     its obligations under Section 4.06 of this Indenture, the resulting,
     surviving or transferee Person (if not such Subsidiary) shall be a Person
     organized and existing under the laws of the jurisdiction under which such
     Subsidiary was organized or under the laws of the United States of America,
     or any State thereof or the District of Columbia, and such Person shall
     expressly assume, by a Guaranty Agreement, all the obligations of such
     Subsidiary, if any, under its Subsidiary Guaranty;

          (2) immediately after giving effect to such transaction or
     transactions on a pro forma basis (and treating any Indebtedness which
     becomes an obligation of the resulting, surviving or transferee Person as a
     result of such transaction as having been issued by such Person at the time
     of such transaction), no Default shall have occurred and be continuing; and

          (3) the Company delivers to the Trustee an Officers' Certificate and
     an Opinion of Counsel, each stating that such consolidation, merger or
     transfer and such Guaranty Agreement, if any, complies with this Indenture.



                                                                              58


The preceding clause (2) will not prohibit any Subsidiary Guarantor that is a
limited liability company from merging with an Affiliate solely for the purpose
of reincorporating such Subsidiary Guarantor as a corporation.



                                                                              59


                                   ARTICLE SIX

                              Defaults and Remedies

          SECTION 6.01. Events of Default. An "Event of Default" occurs if:

          (1) the Company defaults in any payment of interest on any Note when
     the same becomes due and payable, whether or not such payment shall be
     prohibited by Article Ten of this Indenture, and such default continues for
     a period of 30 days;

          (2) the Company (A) defaults in the payment of the principal of any
     Note when the same becomes due and payable at its Stated Maturity, upon
     optional redemption, upon declaration of acceleration or otherwise, whether
     or not such payment shall be prohibited by Article Ten of this Indenture or
     (B) fails to redeem or purchase Notes when required pursuant to this
     Indenture or the Notes, whether or not such redemption or purchase shall be
     prohibited by Article Ten of this Indenture;

          (3) the Company fails to comply with Section 5.01(a) or Section 4.10
     of this Indenture;

          (4) the Company fails to comply with Section 4.03, 4.04 or 4.06 of
     this Indenture and such failure continues for 30 days after the notice
     specified below;

          (5) the Company or any Subsidiary Guarantor fails to comply with any
     of its agreements contained in the Notes or this Indenture (other than
     those referred to in clause (1), (2), (3) or (4) above) and such failure
     continues for 60 days after the notice specified below;

          (6) Indebtedness of the Company, any Subsidiary Guarantor or any
     Significant Subsidiary is not paid within any applicable grace period after
     final maturity or is accelerated by the holders thereof because of a
     default and the total amount of such Indebtedness unpaid or accelerated
     exceeds $15.0 million, or its foreign currency equivalent at the time;

          (7) the Company or any Significant Subsidiary pursuant to or within
     the meaning of any Bankruptcy Law:

               (A) commences a voluntary case;

               (B) consents to the entry of an order for relief against it in an
          involuntary case;

               (C) consents to the appointment of a Custodian of it or for any
          substantial part of its property; or



                                                                              60


               (D) makes a general assignment for the benefit of its creditors;

     or takes any comparable action under any foreign laws relating to
     insolvency;

          (8) a court of competent jurisdiction enters an order or decree under
     any Bankruptcy Law that:

               (A) is for relief against the Company or any Significant
          Subsidiary in an involuntary case;

               (B) appoints a Custodian of the Company or any Significant
          Subsidiary or for any substantial part of its property; or

               (C) orders the winding up or liquidation of the Company or any
          Significant Subsidiary;

     or any similar relief is granted under any foreign laws and the order or
     decree, as described under this Section (8), remains unstayed and in effect
     for 60 consecutive days;

          (9) any judgment or decree is rendered for the payment of money in an
     amount, net of any insurance or indemnity payments actually received in
     respect thereof prior to or within 60 days from the entry thereof, or to be
     received in respect thereof in the event any appeal thereof shall be
     unsuccessful, in excess of $15.0 million against the Company or any
     Significant Subsidiary that is not discharged, bonded or insured by a third
     Person if either an enforcement proceeding thereon is commenced, or such
     judgment or decree remains outstanding for a period of 60 days and is not
     discharged, waived or stayed; or

          (10) except as permitted by this Indenture, any Subsidiary Guaranty
     ceases to be in full force and effect (other than in accordance with the
     terms of such Subsidiary Guaranty) or any Subsidiary Guarantor denies or
     disaffirms its obligations under its Subsidiary Guaranty.

          "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

          A Default under clauses (4) or (5) is not an Event of Default until
the Trustee or the holders of at least 25% in principal amount of the
outstanding Notes notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".

          The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.



                                                                              61


          SECTION 6.02. Acceleration. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the outstanding Notes may declare the principal of and accrued but unpaid
interest on all the Notes to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately; provided, however,
that so long as any Indebtedness permitted to be incurred pursuant to the Senior
Credit Facilities is outstanding, such acceleration will not be effective until
the earlier of (1) the acceleration of such Indebtedness under the Senior Credit
Facilities or (2) five Business Days after receipt by the Company of written
notice of such acceleration. If an Event of Default specified in Section 6.01(7)
or (8) with respect to the Company occurs and is continuing, the principal of
and interest on all of the outstanding Notes will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.

          SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

          SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may, on behalf of the Holders of all of such Notes, waive any existing
Default and its consequences under this Indenture, except a continuing Default
in the payment of principal of and premium, if any, or interest on any such
Notes held by a non-consenting Holder.

          SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01 of this Indenture, that the Trustee determines is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.



                                                                              62


          SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Noteholder may pursue any remedy with respect to this Indenture or the Notes
unless:

          (1) the Holder gives to the Trustee written notice stating that an
     Event of Default is continuing;

          (2) the Holders of at least 25% in principal amount of the Notes make
     a written request to the Trustee to pursue the remedy;

          (3) such Holder or Holders offer to the Trustee reasonable security or
     indemnity against any loss, liability or expense;

          (4) the Trustee does not comply with the request within 60 days after
     receipt of the request and the offer of security or indemnity; and

          (5) the Holders of a majority in principal amount of the Notes do not
     give the Trustee a direction inconsistent with the request during such
     60-day period.

          A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder. In the event that the Definitive Notes are not issued to any
beneficial owner promptly after the Registrar has received a request from the
Holder of a Global Note to issue such Definitive Notes to such beneficial owner
or its nominee, the Company expressly agrees and acknowledges, with respect to
the right of any Holder to pursue a remedy pursuant to this Indenture, the right
of such beneficial holder of Notes to pursue such remedy with respect to the
portion of the Global Note that represents such beneficial holder's Notes as if
such Definitive Notes had been issued.

          SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Notes held by such Holder, on or
after the respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

          SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.08 of this Indenture.

          SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Company, its creditors or its
property and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in



                                                                              63


any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.08 of this Indenture.

          SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article Six, it shall pay out the money or property in
the following order:

          FIRST: to the Trustee for amounts due under Section 7.08 of this
     Indenture;

          SECOND: to holders of Senior Indebtedness of the Company and, if such
     money or property has been collected from a Subsidiary Guarantor, to
     holders of Senior Indebtedness of such Subsidiary Guarantor, in each case
     to the extent required by Articles Ten and Twelve of this Indenture;

          THIRD: to Noteholders for amounts due and unpaid on the Notes for
     principal and interest, ratably, without preference or priority of any
     kind, according to the amounts due and payable on the Notes for principal
     and interest, respectively; and

          FOURTH: to the Company.

          The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Company shall mail to each Noteholder and the Trustee a notice that states
the record date, the payment date and amount to be paid.

          SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in aggregate principal amount of the Notes.

          SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not



                                                                              64


hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.


                                                                              65


                                  ARTICLE SEVEN

                                     Trustee

          SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.

          (b) Except during the continuance of an Event of Default:

          (1) the Trustee undertakes to perform such duties and only such duties
     as are specifically set forth in this Indenture and no implied covenants or
     obligations shall be read into this Indenture against the Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture. However,
     the Trustee shall examine the certificates and opinions to determine
     whether or not they conform to the requirements of this Indenture.

          (c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:

          (1) this paragraph does not limit the effect of paragraph (b) of this
     Section 7.01;

          (2) the Trustee shall not be liable for any error of judgment made in
     good faith by a Trust Officer unless it is proved that the Trustee was
     negligent in ascertaining the pertinent facts; and

          (3) the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05 of this Indenture.

          (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

          (e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.

          (f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.



                                                                              66


          (g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

          (h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

          SECTION 7.02. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
transmit, in the manner and to the extent provided in TIA Section 313(c), notice
of such Default or Event of Default within 90 days after it occurs unless such
Default or Event of Default shall have been cured or waived. Except in the case
of a Default or Event of Default in the payment of the principal of (or premium,
if any, on) or interest on any Note, the Trustee shall be protected in
withholding such notice if it determines that the withholding of such notice is
in the interest of the Holders.

          SECTION 7.03. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.

          (b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.

          (c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.

          (e) The Trustee may consult with counsel, and the written advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with and reliance on the written advice or opinion of
such counsel.

          SECTION 7.04. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.11 and 7.12.



                                                                              67


          SECTION 7.05. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.

          SECTION 7.06. Reserved.

          SECTION 7.07. Reports by Trustee to Holders. As promptly as
practicable after each May 15, beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 of each year, the Trustee
shall mail to each Noteholder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b).

          A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange (if any) on which the Notes are
listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.

          SECTION 7.08. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.

          To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.

          The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in clause (7) or (8) of Section 6.01(a) of
this Indenture with respect to the Company, the expenses are intended to
constitute expenses of administration under the Bankruptcy Law.



                                                                              68


          SECTION 7.09. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Notes may remove the Trustee by so notifying the Trustee and may appoint
a successor Trustee. The Company shall remove the Trustee if:

          (1) the Trustee fails to comply with Section 7.11;

          (2) the Trustee is adjudged bankrupt or insolvent;

          (3) a receiver or other public officer takes charge of the Trustee or
     its property; or

          (4) the Trustee otherwise becomes incapable of acting.

          If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.

          A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.08.

          If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

          If the Trustee fails to comply with Section 7.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

          Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.08 shall continue for the
benefit of the retiring Trustee.

          SECTION 7.10. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.



                                                                              69


          In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.

          SECTION 7.11. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.

          SECTION 7.12. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.



                                                                              70


                                  ARTICLE EIGHT

                       Discharge of Indenture; Defeasance

          SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) When
(1) the Company delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.07 of this Indenture) for cancellation or (2) all
outstanding Notes have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article Three of this Indenture, or will become due and payable within one year,
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Notes, including interest thereon to
maturity or such redemption date (other than Notes replaced pursuant to Section
2.07 of this Indenture), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to
paragraph (c) of this Section 8.01, cease to be of further effect. The Trustee
shall acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.

          (b) Subject to paragraph (c) of this Section 8.01 and Section 8.02,
the Company at any time may terminate (1) all its obligations under the Notes
and this Indenture ("legal defeasance option") or (2) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and
4.13 and the operation of clauses (3) (but only with respect to Section 4.10),
(4), (5), (6), (7), (8) and (9) of Section 6.01(a) of this Indenture (but, in
the case of clauses (7) and (8), with respect only to Significant Subsidiaries)
and the limitations contained in Section 5.01(a)(4) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Notes may not be accelerated because of an Event of Default specified in clauses
(3) (but only with respect to Section 4.10), (4), (5), (6), (7), (8) and (9) of
Section 6.01(a) of this Indenture (but, in the case of clauses (7) and (8), with
respect only to Significant Subsidiaries) or because of the failure of the
Company to comply with Section 5.01(a)(4). If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor,
if any, shall be released from all its obligations with respect to its
Subsidiary Guaranty.

          Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

          (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.08 and 7.09 and in
this



                                                                              71


Article Eight shall survive until the Notes have been paid in full. Thereafter,
the Company's obligations in Sections 7.08, 8.04 and 8.05 shall survive.

          SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:

          (1) the Company irrevocably deposits in trust with the Trustee money
     or U.S. Government Obligations for the payment of principal of and interest
     on the Notes to maturity or redemption, as the case may be;

          (2) the Company delivers to the Trustee a certificate from a
     nationally recognized firm of independent accountants expressing their
     opinion that the payments of principal and interest when due and without
     reinvestment on the deposited U.S. Government Obligations plus any
     deposited money without investment will provide cash at such times and in
     such amounts as will be sufficient to pay principal and interest when due
     on all the Notes to maturity or redemption, as the case may be;

          (3) 91 days pass after the deposit is made and during the 91-day
     period no Default specified in Sections 6.01(7) or (8) of this Indenture
     with respect to the Company occurs which is continuing at the end of the
     period;

          (4) the deposit does not constitute a default under any other
     agreement binding on the Company and is not prohibited by Article Ten of
     this Indenture;

          (5) the Company delivers to the Trustee an Opinion of Counsel to the
     effect that the trust resulting from the deposit does not constitute, or is
     qualified as, a regulated investment company under the Investment Company
     Act of 1940;

          (6) in the case of the legal defeasance option, the Company shall have
     delivered to the Trustee an Opinion of Counsel stating that (A) the Company
     has received from, or there has been published by, the Internal Revenue
     Service a ruling, or (B) since the date of this Indenture there has been a
     change in the applicable Federal income tax law, in either case to the
     effect that, and based thereon such Opinion of Counsel shall confirm that,
     the Noteholders will not recognize income, gain or loss for Federal income
     tax purposes as a result of such defeasance and will be subject to Federal
     income tax on the same amounts, in the same manner and at the same times as
     would have been the case if such defeasance had not occurred;

          (7) in the case of the covenant defeasance option, the Company shall
     have delivered to the Trustee an Opinion of Counsel to the effect that the
     Noteholders will not recognize income, gain or loss for Federal income tax
     purposes as a result of such covenant defeasance and will be subject to
     Federal income tax on the same amounts, in the same manner and at the same
     times as would have been the case if such covenant defeasance had not
     occurred; and



                                                                              72


          (8) the Company delivers to the Trustee an Officers' Certificate and
     an Opinion of Counsel, each stating that all conditions precedent to the
     defeasance and discharge of the Notes as contemplated by this Article Eight
     have been complied with.

          Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article Three of this Indenture.

          SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Eight. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Notes. Money and
securities so held in trust are not subject to Article Ten of this Indenture.

          SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

          Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Noteholders entitled to the money must look to the Company for
payment as general creditors.

          SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.

          SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article Eight by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's and each Subsidiary
Guarantor's obligations under this Indenture, each Subsidiary Guaranty and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to this Article Eight until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article Eight; provided, however, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government Obligations
held by the Trustee or Paying Agent.



                                                                              73


                                  ARTICLE NINE

                                   Amendments

          SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to or consent of any Noteholder:

          (1) to cure any ambiguity, omission, defect or inconsistency;

          (2) to comply with Article Five of this Indenture;

          (3) to provide for uncertificated Notes in addition to or in place of
     certificated Notes; provided, however, that the uncertificated Notes are
     issued in registered form for purposes of Section 163(f) of the Code or in
     a manner such that the uncertificated Notes are described in Section
     163(f)(2)(B) of the Code;

          (4) to add guarantees with respect to the Notes, including any
     Subsidiary Guaranties, or to secure the Notes;

          (5) to add to the covenants of the Company or any Subsidiary Guarantor
     for the benefit of the Holders or to surrender any right or power herein
     conferred upon the Company or any Subsidiary Guarantor;

          (6) to make any change that does not adversely affect the rights of
     any Noteholder;

          (7) to comply with any requirements of the SEC in connection with
     qualifying, or maintaining the qualification of, this Indenture under the
     TIA;

          (8) to make any amendment to the provisions of this Indenture relating
     to the transfer and legending of Notes; provided, however, that (a)
     compliance with this Indenture as so amended would not result in Notes
     being transferred in violation of the Securities Act or any other
     applicable securities law and (b) such amendment does not materially and
     adversely affect the rights of Holders to transfer Notes;

          (9) to conform the text of this Indenture, the Subsidiary Guaranties
     or the Notes to any provision set forth in the offering circular, dated
     December 14, 2005 relating to the Notes, under the heading "Description of
     Notes" to the extent that such provision as set forth in such offering
     circular was intended to be a verbatim recitation of a provision in this
     Indenture, the Subsidiary Guaranties or the Notes; or

          (10) to provide for the issuance of Additional Notes in accordance
     with the limitations set forth in this Indenture as of the date of this
     Indenture.



                                                                              74


          An amendment under this Section may not make any change that adversely
affects the rights under Article Ten or Twelve of any holder of Senior
Indebtedness of the Company or of a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or their Representative) consent to
such change.

          After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.

          SECTION 9.02. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture, or the Notes with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange for the Notes) and any past or existing Default or compliance
with any provisions may also be waived with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding. However,
without the consent of each Holder affected thereby, an amendment or waiver may
not:

          (1) reduce the amount of Notes whose Holders must consent to an
     amendment;

          (2) reduce the rate of or extend the time for payment of interest on
     any Note;

          (3) reduce the principal of or change the Stated Maturity of any Note;

          (4) reduce the amount payable upon the redemption of any Note or
     change the time at which any Note may be redeemed, in each case as
     contained in Article Three of this Indenture or paragraph 5 of the Notes;

          (5) make any Note payable in money other than that stated in the Note;

          (6) make any change in Section 6.04 or 6.07 or the second sentence of
     this Section;

          (7) make any changes in the ranking or priority of any Note that would
     adversely affect the Holders; or

          (8) make any change in, or release other than in accordance with this
     Indenture, any Subsidiary Guaranty that would adversely affect the Holders.

          It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.

          An amendment under this Section may not make any change that adversely
affects the rights under Article Ten or Twelve of any holder of Senior



                                                                              75


Indebtedness of the Company or of a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.

          After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.

          SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.

          SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Note shall bind the Holder and
every subsequent Holder of that Note or portion of the Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent or
waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Noteholder. An amendment or waiver becomes effective upon the
execution of such amendment or waiver by the Trustee.

          The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.

          SECTION 9.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.

          SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article Nine if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section



                                                                              76


7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.

          SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to all Holders and is paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.



                                                                              77


                                   ARTICLE TEN

                                  Subordination

          SECTION 10.01. Agreement To Subordinate. The Company agrees, and each
Noteholder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article Ten, to the prior payment in full in cash of all Senior
Indebtedness of the Company and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Notes shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Company and only Indebtedness of the Company which is Senior Indebtedness of the
Company shall rank senior to the Notes in accordance with the provisions set
forth herein. All provisions of this Article Ten shall be subject to Section
10.12.

          SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:

          (1) holders of Senior Indebtedness of the Company shall be entitled to
     receive payment in full in cash of such Senior Indebtedness before
     Noteholders shall be entitled to receive any payment of principal of or
     interest on the Notes; and

          (2) until such Senior Indebtedness is paid in full in cash, any
     payment or distribution to which Noteholders would be entitled but for this
     Article Ten shall be made to holders of such Senior Indebtedness as their
     interests may appear, except that Noteholders may receive and retain
     Permitted Junior Securities.

          SECTION 10.03. Default on Senior Indebtedness of the Company. The
Company shall not pay the principal of or interest on the Notes or make any
deposit pursuant to Section 8.01 of this Indenture and may not purchase, redeem
or otherwise retire any Notes (collectively, "pay the Notes") (except that
Noteholders may receive and retain Permitted Junior Securities and payments made
from funds deposited with the Trustee pursuant to Section 8.01 or 8.02) if
either of the following (a "Payment Default") occurs (a) any Obligation on any
Designated Senior Indebtedness of the Company is not paid in full in cash when
due; or (b) any other default on Designated Senior Indebtedness of the Company
occurs and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, the Payment Default has been
cured or waived and any such acceleration has been rescinded or such Designated
Senior Indebtedness has been paid in full in cash; provided, however, that the
Company shall be entitled to pay the Notes without regard to the foregoing if
the Company and the Trustee receive written notice approving such payment from
the Representatives of all Designated Senior Indebtedness with respect to which
a Payment Default has occurred



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and is continuing. During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company
shall not pay the Notes for a period (a "Payment Blockage Period") commencing
upon the receipt by the Trustee of (with a copy to the Company) written notice
(a "Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter. The Payment Blockage Period shall end earlier if
such Payment Blockage Period is terminated (1) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice; (2)
because the default giving rise to such Blockage Notice is cured, waived or
otherwise no longer continuing; or (3) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash. Notwithstanding the
provisions described in the immediately preceding two sentences (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of such Designated Senior Indebtedness or the Representative of such
Designated Senior Indebtedness shall have accelerated the maturity of such
Designated Senior Indebtedness, the Company shall be entitled to resume payments
on the Notes after termination of such Payment Blockage Period. The Notes shall
not be subject to more than one Payment Blockage Period in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of the Company during such period. For purposes
of this Section, no nonpayment default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness of the Company initiating such
Payment Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.

          SECTION 10.04. Acceleration of Payment of Notes. If payment of the
Notes is accelerated because of an Event of Default, the Company or the Trustee
shall promptly notify the holders of the Designated Senior Indebtedness of the
Company (or their Representatives) of the acceleration. If any Designated Senior
Indebtedness of the Company is outstanding, neither the Company nor any
Subsidiary Guarantor may pay the Notes until five Business Days after the
Representatives of all the issues of such Designated Senior Indebtedness receive
notice of such acceleration and, thereafter, may pay the Notes only if this
Article Ten otherwise permits payment at that time.

          SECTION 10.05. When Distribution Must Be Paid Over. If a distribution
is made to Noteholders that because of this Article Ten should not have been
made to them, the Noteholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness of the Company and pay it over to them
as their interests may appear.

          SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Company is paid in full in cash and until the Notes are paid in full,
Noteholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions



                                                                              79


applicable to such Senior Indebtedness to the extent that the distributions
otherwise payable to the Noteholders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article Ten to holders of such
Senior Indebtedness which otherwise would have been made to Noteholders is not,
as between the Company and Noteholders, a payment by the Company on such Senior
Indebtedness.

          SECTION 10.07. Relative Rights. This Article Ten defines the relative
rights of Noteholders and holders of Senior Indebtedness of the Company. Nothing
in this Indenture shall:

          (1) impair, as between the Company and Noteholders, the obligation of
     the Company, which is absolute and unconditional, to pay principal of and
     interest on the Notes in accordance with their terms; or

          (2) prevent the Trustee or any Noteholder from exercising its
     available remedies upon a Default, subject to the rights of holders of
     Senior Indebtedness of the Company to receive distributions and payments
     otherwise payable to Noteholders.

          SECTION 10.08. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness of the Company to enforce the subordination
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.

          SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent shall continue to make payments on
the Notes unless the Trustee or Paying Agent has actual knowledge of the
existence of facts that under this Article Ten would prohibit the making of any
such payments or unless, not less than two Business Days prior to the date of
such payment, a Trust Officer of the Trustee receives notice satisfactory to it
that such payments are prohibited by this Article Ten; provided, however, that
the subordination of the Notes to Senior Indebtedness shall not be affected and
the Noteholders receiving any payments in contravention of this Article Ten
shall otherwise be subject to this Article Ten. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company shall be entitled to give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative shall be entitled to give the notice.

          The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of the Company with the same rights it would have if
it were not Trustee. The Registrar and co-registrar and the Paying Agent shall
be entitled to do the same with like rights. The Trustee shall be entitled to
all the rights set forth in this Article Ten with respect to any Senior
Indebtedness of the Company which may at any time be held by it, to the same
extent as any other holder of such Senior Indebtedness; and nothing in Article
Seven of this Indenture shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article Ten shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.08 of this Indenture.



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          SECTION 10.10. Distribution or Notice to Representative. Whenever any
Person is to make a distribution or give a notice to holders of Senior
Indebtedness of the Company such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).

          SECTION 10.11. Article Ten Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Notes by
reason of any provision in this Article Ten shall not be construed as preventing
the occurrence of a Default. Nothing in this Article Ten shall have any effect
on the right of the Noteholders or the Trustee to accelerate the maturity of the
Notes.

          SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article Eight of this Indenture by
the Trustee for the payment of principal of and interest on the Notes shall not
be subordinated to the prior payment of any Senior Indebtedness of the Company
or subject to the restrictions set forth in this Article Ten, and none of the
Noteholders shall be obligated to pay over any such amount to the Company or any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.

          SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article Ten, the Trustee and the Noteholders shall
be entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Noteholders
or (c) upon the Representatives of Senior Indebtedness of the Company for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Ten. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article Ten, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article Ten, and, if
such evidence is not furnished, the Trustee shall be entitled to defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.03 of this
Indenture shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article Ten.

          SECTION 10.14. Trustee To Effectuate Subordination. Each Noteholder by
accepting a Note authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Noteholders and the holders of Senior Indebtedness of
the Company as provided in



                                                                              81


this Article Ten and appoints the Trustee as attorney-in-fact for any and all
such purposes.

          SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness of the Company. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Noteholders or the Company or any other Person, money or assets to which any
holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article Ten or otherwise.

          SECTION 10.16. Reliance by Holders of Senior Indebtedness of the
Company on Subordination Provisions. Each Noteholder by accepting a Note
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Notes, to acquire and continue to
hold, or to continue to hold, such Senior Indebtedness and such holder of such
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.



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                                 ARTICLE ELEVEN

                              Subsidiary Guaranties

          SECTION 11.01. Guaranties. Subject to this Article Eleven, each
Subsidiary Guarantor hereby unconditionally and irrevocably guarantees, jointly
and severally, to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of principal of and interest on the Notes when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture and the Notes and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Notes (all the
foregoing being hereinafter collectively called the "Guaranteed Obligations").
Each Subsidiary Guarantor further agrees that the Guaranteed Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
such Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound
under this Article Eleven notwithstanding any extension or renewal of any
Guaranteed Obligation.

          Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Notes or the Guaranteed Obligations. The obligations of
each Subsidiary Guarantor hereunder shall not be affected by (1) the failure of
any Holder or the Trustee to assert any claim or demand or to enforce any right
or remedy against the Company or any other Person (including any Subsidiary
Guarantor) under this Indenture, the Notes or any other agreement or otherwise;
(2) any extension or renewal of any thereof; (3) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Indenture,
the Notes or any other agreement; (4) the release of any security held by any
Holder or the Trustee for the Guaranteed Obligations or any of them; (5) the
failure of any Holder or the Trustee to exercise any right or remedy against any
other guarantor of the Guaranteed Obligations; or (6) except as set forth in
Section 11.06, any change in the ownership of such Subsidiary Guarantor.

          Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.

          Each Subsidiary Guaranty is, to the extent and in the manner set forth
in Article Twelve of this Indenture, subordinated and subject in right of
payment to the prior payment in full of the principal of and premium, if any,
and interest on all Senior Indebtedness of the Subsidiary Guarantor giving such
Subsidiary Guaranty and each Subsidiary Guaranty is made subject to such
provisions of this Indenture.



                                                                              83


          Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or the
Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Notes or any other agreement, by any waiver or modification of
any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate as
a discharge of such Subsidiary Guarantor as a matter of law or equity.

          Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Obligation
is rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.

          In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Subsidiary Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of
such Guaranteed Obligations, and (B) accrued and unpaid interest on such
Guaranteed Obligations (but only to the extent not prohibited by law).

          Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Guaranteed Obligations guaranteed hereby
until payment in full in cash of all Guaranteed Obligations and all obligations
to which the Guaranteed Obligations are subordinated as provided in Article
Twelve of this Indenture. Each Subsidiary Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the Guaranteed Obligations hereby may be accelerated as
provided in Article Six for the purposes of such Subsidiary Guarantor's
Subsidiary Guaranty herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article Six, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Subsidiary Guarantor for the purposes of this Section.



                                                                              84


          Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.

          SECTION 11.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.

          SECTION 11.03. Successors and Assigns. This Article Eleven shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.

          SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article Eleven shall operate as a waiver thereof, nor shall a single
or partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article Eleven at
law, in equity, by statute or otherwise.

          SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article Eleven, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.

          SECTION 11.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor
will be released from its obligations under this Article Eleven (other than any
obligation that may have arisen under Section 11.07)

          (1) upon the sale (including any sale pursuant to any exercise of
     remedies by a holder of Indebtedness of the Company or of such Subsidiary
     Guarantor) or other disposition (including by way of consolidation or
     merger) of a Subsidiary Guarantor, including the sale or disposition of the
     Capital Stock of a Subsidiary Guarantor following which such Subsidiary
     Guarantor is no longer a Subsidiary,


                                                                              85

          (2) upon the sale or disposition of all or substantially all the
     assets of such Subsidiary Guarantor,

          (3) upon the designation of such Subsidiary Guarantor as an
     Unrestricted Subsidiary in accordance with the terms of this Indenture,

          (4) at such time as such Subsidiary Guarantor does not have any
     Indebtedness outstanding that would have required such Subsidiary Guarantor
     to enter into a Guaranty Agreement pursuant to Section 4.13 of this
     Indenture and the Company provides an Officers' Certificate to the Trustee
     certifying that no such Indebtedness is outstanding and that the Company
     elects to have such Subsidiary Guarantor released from this Article Eleven,
     or

          (5) upon defeasance of the Notes pursuant to Article Eight, or

          (6) upon the full satisfaction of the Company's obligations under this
     Indenture pursuant to Section 8.01(a) or otherwise in accordance with the
     terms of the Indenture;

provided, however, that in the case of clauses (1) and (2) above, (i) such sale
or other disposition is made to a Person other than the Company or a Subsidiary
of the Company, (ii) such sale or disposition is otherwise permitted by this
Indenture and (iii) the Company provides an Officers' Certificate to the Trustee
to the effect that the Company will comply with its obligations under Section
4.06 of this Indenture. At the request of the Company, the Trustee shall execute
and deliver an appropriate instrument evidencing such release.

          SECTION 11.07. Contribution. Each Subsidiary Guarantor that makes a
payment under its Subsidiary Guaranty shall be entitled upon payment in full of
all Guaranteed Obligations under this Indenture to a contribution from each
other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.



                                                                              86

                                 ARTICLE TWELVE

                     Subordination of Subsidiary Guaranties

          SECTION 12.01. Agreement To Subordinate. Each Subsidiary Guarantor
agrees, and each Noteholder by accepting a Note agrees, that the Indebtedness
evidenced by such Subsidiary Guarantor's Subsidiary Guaranty is subordinated in
right of payment in full in cash, to the extent and in the manner provided in
this Article Twelve, to the prior payment of all Senior Indebtedness of such
Subsidiary Guarantor and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Obligations of a
Subsidiary Guarantor shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of such Subsidiary Guarantor and only Senior
Indebtedness of such Subsidiary Guarantor (including such Subsidiary Guarantor's
Guaranty of Senior Indebtedness of the Company) shall rank senior to the
Obligations of such Subsidiary Guarantor in accordance with the provisions set
forth herein.

          SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of any Subsidiary Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:

          (1) holders of Senior Indebtedness of such Subsidiary Guarantor shall
     be entitled to receive payment in full in cash of such Senior Indebtedness
     before Noteholders shall be entitled to receive any payment pursuant to the
     Subsidiary Guaranty of such Subsidiary Guarantor; and

          (2) until the Senior Indebtedness of any Subsidiary Guarantor is paid
     in full in cash, any payment or distribution to which Noteholders would be
     entitled but for this Article Twelve shall be made to holders of such
     Senior Indebtedness as their interests may appear, except that Noteholders
     may receive and retain Permitted Junior Securities.

          SECTION 12.03. Default on Senior Indebtedness of Subsidiary Guarantor.
No Subsidiary Guarantor shall make its Subsidiary Guaranty or purchase, redeem
or otherwise retire or defease any Notes or other Obligations (collectively,
"pay its Subsidiary Guaranty") (except that Noteholders may receive and retain
Permitted Junior Securities and payments made from funds deposited with the
Trustee pursuant to Section 8.01 or 8.02) if either of the following (a "Payment
Default") occurs (a) any obligation on any Designated Senior Indebtedness of
such Subsidiary Guarantor is not paid in full in cash when due; or (b) any other
default on Designated Senior Indebtedness of such Subsidiary Guarantor occurs
and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms; unless, in either case, the Payment Default has been
cured or waived and any such acceleration has been rescinded or such Designated
Senior Indebtedness has been paid in full in cash; provided, however, that any
Subsidiary



                                                                              87


Guarantor shall be entitled to pay its Subsidiary Guaranty without regard to the
foregoing if such Subsidiary Guarantor and the Trustee receive written notice
approving such payment from the Representatives of all Designated Senior
Indebtedness with respect to which a Payment Default has occurred and is
continuing. During the continuance of any default (other than a Payment Default)
with respect to any Designated Senior Indebtedness of such Subsidiary Guarantor
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Subsidiary
Guarantor shall not pay its Subsidiary Guaranty for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee of (with a copy to
such Subsidiary Guarantor) written notice (a "Blockage Notice") of such default
from the Representative of such Designated Senior Indebtedness specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter. The
Payment Blockage Period shall end earlier if such Payment Blockage Period is
terminated (1) by written notice to the Trustee and such Subsidiary Guarantor
from the Person or Persons who gave such Blockage Notice; (2) because the
default giving rise to such Blockage Notice is cured, waived or otherwise no
longer continuing; or (3) because such Designated Senior Indebtedness has been
discharged or repaid in full in cash. Notwithstanding the provisions described
in the immediately preceding two sentences (but subject to the provisions
contained in the first sentence of this Section), unless the holders of such
Designated Senior Indebtedness giving such Payment Notice or the Representative
of such Designated Senior Indebtedness shall have accelerated the maturity of
such Designated Senior Indebtedness, any Subsidiary Guarantor shall be entitled
to resume payments pursuant to its Subsidiary Guaranty after termination of such
Payment Blockage Period. No Subsidiary Guarantor shall be subject to more than
one Blockage Period in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness of such
Subsidiary Guarantor during such period. For purposes of this Section, no
nonpayment default or event of default which existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness of such Subsidiary Guarantor initiating such
Payment Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.

          SECTION 12.04. Demand for Payment. If a demand for payment is made on
a Subsidiary Guarantor pursuant to Article Eleven of this Indenture, the Trustee
shall promptly notify the holders of the Designated Senior Indebtedness of such
Subsidiary Guarantor (or their Representatives) of such demand.

          SECTION 12.05. When Distribution Must Be Paid Over. If a distribution
is made to Noteholders that because of this Article Twelve should not have been
made to them, the Noteholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness of the applicable Subsidiary Guarantor
and pay it over to them or their Representatives as their interests may appear.



                                                                              88


          SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full in cash and until the Notes are paid in
full, Noteholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness of such
Subsidiary Guarantor to the extent that the distributions otherwise payable to
the Noteholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article Twelve to holders of such Senior
Indebtedness which otherwise would have been made to Noteholders is not, as
between the relevant Subsidiary Guarantor and Noteholders, a payment by such
Subsidiary Guarantor on such Senior Indebtedness.

          SECTION 12.07. Relative Rights. This Article Twelve defines the
relative rights of Noteholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall:

          (1) impair, as between a Subsidiary Guarantor and Noteholders, the
     obligation of such Subsidiary Guarantor, which is absolute and
     unconditional, to pay its Subsidiary Guaranty to the extent set forth in
     Article Eleven; or

          (2) prevent the Trustee or any Noteholder from exercising its
     available remedies upon a default by such Subsidiary Guarantor under its
     Subsidiary Guaranty, subject to the rights of holders of Senior
     Indebtedness of such Subsidiary Guarantor to receive distributions and
     payments otherwise payable to Noteholders.

          SECTION 12.08. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness of any Subsidiary Guarantor to enforce the
subordination of the Subsidiary Guaranty of such Subsidiary Guarantor shall be
impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.

          SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent shall continue to make payments on
any Subsidiary Guaranty unless the Trustee or Paying Agent has actual knowledge
of the existence of facts that would prohibit the making of any such payments or
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives written notice satisfactory to it that
such payments are prohibited by this Article Twelve; provided, however, that the
subordination of the Notes to Senior Indebtedness shall not be affected and the
Noteholders receiving any payments in contravention of this Article Twelve shall
otherwise be subject to this Article Twelve. The Company, the relevant
Subsidiary Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to give the notice; provided, however, that, if an issue of
Senior Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative shall be entitled to give the notice.

          The Trustee in its individual or any other capacity shall be entitled
to hold Senior Indebtedness of any Subsidiary Guarantor with the same rights it
would have if it



                                                                              89


were not the Trustee. The Registrar and co-registrar and the Paying Agent may do
the same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article Twelve with respect to any Senior Indebtedness of any
Subsidiary Guarantor which may at any time be held by it, to the same extent as
any other holder of such Senior Indebtedness; and nothing in Article Seven of
this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article Twelve shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.08 of this Indenture.

          SECTION 12.10. Distribution or Notice to Representative. Whenever any
Person is to make a distribution or give a notice to holders of Senior
Indebtedness of any Subsidiary Guarantor, such Person shall be entitled to make
such distribution or give such notice to their Representative (if any).

          SECTION 12.11. Article Twelve Not To Prevent Events of Default or
Limit Right To Demand Payment. The failure to make a payment pursuant to a
Subsidiary Guaranty by reason of any provision in this Article Twelve shall not
be construed as preventing the occurrence of a Default. Nothing in this Article
Twelve shall have any effect on the right of the Noteholders or the Trustee to
make a demand for payment on any Subsidiary Guarantor pursuant to its Subsidiary
Guaranty.

          SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article Twelve, the Trustee and the Noteholders
shall be entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Noteholders
or (c) upon the Representatives for the holders of Senior Indebtedness of any
Subsidiary Guarantor for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such Senior
Indebtedness and other indebtedness of such Subsidiary Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Twelve. In the event
that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee shall be entitled to request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness of such Subsidiary Guarantor held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article Twelve, and, if such evidence is not furnished, the Trustee shall be
entitled to defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.03 of this Indenture shall be applicable to all actions or omissions
of actions by the Trustee pursuant to this Article Twelve.

          SECTION 12.13. Trustee To Effectuate Subordination. Each Noteholder by
accepting a Note authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between



                                                                              90


the Noteholders and the holders of Senior Indebtedness of any Subsidiary
Guarantor as provided in this Article Twelve and appoints the Trustee as
attorney-in-fact for any and all such purposes.

          SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Noteholders or the Company or any other Person, money or assets to
which any holders of such Senior Indebtedness shall be entitled by virtue of
this Article Twelve or otherwise.

          SECTION 12.15. Reliance by Holders of Senior Indebtedness of
Subsidiary Guarantors on Subordination Provisions. Each Noteholder by accepting
a Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of any Subsidiary Guarantor, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.



                                                                              91


                                ARTICLE THIRTEEN

                                  Miscellaneous

          SECTION 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

          SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:

          if to the Company or any Subsidiary Guarantor:

          SHG Acquisition Corp.
          c/o Skilled Healthcare Group, Inc.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, CA 92610

          Attention of:
          General Counsel

          if to the Trustee:

          Wells Fargo Bank,
          707 Wilshire Blvd
          17th Floor
          Los Angeles, CA 90017

          The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

          Any notice or communication mailed to a Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.

          Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

          SECTION 13.03. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, any Subsidiary Guarantor, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).



                                                                              92


          SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:

          (1) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of the signers,
     all conditions precedent, if any, provided for in this Indenture relating
     to the proposed action have been complied with; and

          (2) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee stating that, in the opinion of such counsel,
     all such conditions precedent have been complied with.

          SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

          (1) a statement that the individual making such certificate or opinion
     has read such covenant or condition;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of such individual, he has made
     such examination or investigation as is necessary to enable him to express
     an informed opinion as to whether or not such covenant or condition has
     been complied with; and

          (4) a statement as to whether or not, in the opinion of such
     individual, such covenant or condition has been complied with.

          SECTION 13.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Notes outstanding at the time shall be considered
in any such determination.

          SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Noteholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.

          SECTION 13.08. Legal Holidays. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no



                                                                              93


interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.

          SECTION 13.09. Governing Law. This Indenture and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.

          SECTION 13.10. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under
the Notes or this Indenture or of such Subsidiary Guarantor under its Subsidiary
Guaranty, or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note, each
Noteholder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Notes.

          SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.

          SECTION 13.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

          SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.



                                                                              94


     IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above written.

                                        SHG ACQUISITION CORP..


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

The undersigned hereby acknowledges
and agrees that, upon the
effectiveness of the merger of SHG
Acquisition Corp. with and into
Skilled Healthcare Group, Inc., with
Skilled Healthcare Group, Inc.
continuing as the surviving
corporation, it shall succeed by
operation of law to all of the rights
and obligations of SHG Acquisition
Corp., set forth herein and that all
references to the "Company" shall
thereupon be deemed to be references
to the undersigned.

SKILLED HEALTHCARE GROUP, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------



                                        The undersigned hereby acknowledges and
                                        agrees that, upon the effectiveness of
                                        the merger of SHG Acquisition Corp. with
                                        and into Skilled Healthcare Group, Inc.,
                                        with Skilled Healthcare Group, Inc.
                                        continuing as the surviving corporation,
                                        the undersigned shall become a party to
                                        this Indenture

                                        [SUBSIDIARY GUARANTORS]


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                                                      SCHEDULE I

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                        as Trustee


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------



                                                                      SCHEDULE I

                                   SCHEDULE I

                          LIST OF SUBSIDIARY GUARANTORS

Delaware Corporations

Hallmark Investment Group, Inc.
Summit Care Corporation
Summit Care Pharmacy, Inc.

Delaware Limited Liability Companies

Alexandria Care Center, LLC
Alta Care Center, LLC
Anaheim Terrace Care Center, LLC
Baldwin Healthcare and Rehabilitation Center, LLC
Bay Crest Care Center, LLC
Briarcliff Nursing and Rehabilitation Center GP, LLC
Brier Oak on Sunset, LLC
Carehouse Healthcare Center, LLC
Carson Senior Assisted Living, LLC
Clairmont Beaumont GP, LLC
Clairmont Longview GP, LLC
Colonial New Braunfels GP, LLC
Colonial Tyler GP, LLC
Comanche Nursing Center GP, LLC
Coronado Nursing Center GP, LLC
Devonshire Care Center, LLC
Elmcrest Care Center, LLC
Eureka Healthcare and Rehabilitation Center, LLC
Flatonia Oak Manor GP, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC
Fountain View Subacute and Nursing Center, LLC
Granada Healthcare and Rehabilitation Center, LLC
Guadalupe Valley Nursing Center GP, LLC
Hallettsville Rehabilitation GP, LLC
Hallmark Rehabilitation GP, LLC
Hancock Park Rehabilitation Center, LLC
Hancock Park Senior Assisted Living, LLC
Hemet Senior Assisted Living, LLC
Highland Healthcare and Rehabilitation Center, LLC
Hospice Care Investments, LLC
Hospice Care of the West, LLC
Hospitality Nursing GP, LLC
Leasehold Resource Group, LLC
Live Oak Nursing Center GP, LLC
Louisburg Healthcare and Rehabilitation Center, LLC
Montebello Care Center, LLC
Monument Rehabilitation GP, LLC
Oak Crest Nursing Center GP, LLC
Oakland Manor GP, LLC
Pacific Healthcare and Rehabilitation Center, LLC
Richmond Healthcare and Rehabilitation Center, LLC



                                                                               2


Rio Hondo Subacute and Nursing Center, LLC
Rossville Healthcare and Rehabilitation Center, LLC
Royalwood Care Center, LLC
Seaview Healthcare and Rehabilitation Center, LLC
Sharon Care Center, LLC
Shawnee Gardens Healthcare and Rehabilitation Center, LLC
Skilled Healthcare, LLC
Southwest Payroll Services, LLC
Southwood Care Center GP, LLC
Spring Senior Assisted Living, LLC
St. Elizabeth Healthcare and Rehabilitation Center, LLC
St. Luke Healthcare and Rehabilitation Center, LLC
Sycamore Park Care Center, LLC
Texas Cityview Care Center GP, LLC
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
The Clairmont Tyler GP, LLC
The Earlwood, LLC
The Heights of Summerlin, LLC
The Woodlands Healthcare Center GP, LLC
Town and Country Manor GP, LLC
Travelmark Staffing, LLC
Valley Healthcare Center, LLC
Villa Maria Healthcare Center, LLC
Vintage Park at Atchison, LLC
Vintage Park at Baldwin City, LLC
Vintage Park at Gardner, LLC
Vintage Part at Lenexa, LLC
Vintage Park at Louisburg, LLC
Vintage Park at Osawatomie, LLC
Vintage Park at Ottawa, LLC
Vintage Park at Paola, LLC
Vintage Park at Stanley, LLC
Wathena Healthcare and Rehabilitation Center, LLC
West Side Campus of Care GP, LLC
Willow Creek Healthcare Center, LLC
Woodland Care Center, LLC

Delaware Limited Partnerships

Briarcliff Nursing and Rehabilitation Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Comanche Nursing Center, LP
Coronado Nursing Center, LP
Flatonia Oak Manor, LP
Guadalupe Valley Nursing Center, LP
Hallettsville Rehabilitation and Nursing Center, LP
Hallmark Rehabilitation, LP
Hospice of the West, LP
Hospitality Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP



                                                                               3


Oakland Manor Nursing Center, LP
SHG Resources, LP
Southwood Care Center, LP
Texas Cityview Care Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
The Clairmont Tyler, LP
The Woodlands Healthcare Center, LP
Town and Country Manor, LP
Travelmark Staffing, LP
West Side Campus of Care, LP



                                                                               4


                                             RULE 144A/REGULATION S/IAI APPENDIX

                      PROVISIONS RELATING TO INITIAL NOTES,
                             PRIVATE EXCHANGE NOTES
                               AND EXCHANGE NOTES

     1. Definitions

     1.1 Definitions

     For the purposes of this Appendix the following terms shall have the
meanings indicated below:

          "Additional Notes" means Notes (other than the Initial Notes issued on
the Issue Date) issued under this Indenture, as part of the same series as the
Initial Notes issued on the Issue Date.

          "Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Note or beneficial
interest therein, the rules and procedures of the Depository for such a
Temporary Regulation S Global Note, to the extent applicable to such transaction
and as in effect from time to time.

          "Definitive Note" means a certificated Initial Note or Exchange Note
or Private Exchange Note bearing, if required, the appropriate restricted
securities legend set forth in Section 2.3(e).

          "Depository" means The Depository Trust Company, its nominees and
their respective successors.

          "Distribution Compliance Period", with respect to any Notes, means the
period of 40 consecutive days beginning on and including the later of (i) the
day on which such Notes are first offered to Persons other than distributors (as
defined in Regulation S under the Securities Act) in reliance on Regulation S
and (ii) the issue date with respect to such Notes.

          "Exchange Notes" means (1) the 11% Senior Subordinated Notes Due 2014
issued pursuant to the Indenture in connection with a Registered Exchange Offer
and (2) Additional Notes, if any, issued pursuant to a registration statement
filed with the SEC under the Securities Act.

          "IAI" means an institutional "accredited investor", as defined in Rule
501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.



                                                                               5


          "Initial Purchasers" means (1) with respect to the Initial Notes
issued on the Issue Date, Credit Suisse First Boston Corporation and JPMorgan
Notes Inc. and (2) with respect to each issuance of Additional Notes, the
Persons purchasing such Additional Notes under the related Purchase Agreement.

          "Initial Notes" means (1) $200,000,000 aggregate principal amount of
11% Senior Subordinated Notes Due 2014 issued on the Issue Date and (2)
Additional Notes, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.

          "Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Notes.

          "Private Exchange Notes" means any 11% Senior Subordinated Notes Due
2014 issued in connection with a Private Exchange.

          "Purchase Agreement" means (1) with respect to the Initial Notes
issued on the Issue Date, the Purchase Agreement dated December 14, 2005, among
SHG Acquisition Corp. and the Initial Purchasers, and the Joinder Agreement,
dated the Issue Date, pursuant to which the Company and the Subsidiary
Guarantors became parties to such Purchase Agreement, and (2) with respect to
each issuance of Additional Notes, the purchase agreement or underwriting
agreement among the Company, the Subsidiary Guarantors and the Persons
purchasing such Additional Notes.

          "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

          "Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for the Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.

          "Registration Rights Agreement" means (1) with respect to the Initial
Notes issued on the Issue Date, the Registration Rights Agreement dated December
27, 2005, among the Company, the Subsidiary Guarantors and the Initial
Purchasers and (2) with respect to each issuance of Additional Notes issued in a
transaction exempt from the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Company, the Subsidiary
Guarantors and the Persons purchasing such Additional Notes under the related
Purchase Agreement.

          "Rule 144A Notes" means all Notes offered and sold to QIBs in reliance
on Rule 144A.

          "Notes" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.

          "Securities Act" means the Securities Act of 1933.



                                                                               6


          "Notes Custodian" means the custodian with respect to a Global Note
(as appointed by the Depository), or any successor Person thereto and shall
initially be the Trustee.

          "Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Notes or Private
Exchange Notes pursuant to a Registration Rights Agreement.

          "Transfer Restricted Notes" means Notes that bear or are required to
bear the legend relating to restrictions on transfer relating to the Securities
Act set forth in Section 2.3(e) hereto.

          1.2 Other Definitions



                                           Defined in
                  Term                      Section:
                  ----                     ----------
                                        
"Agent Members".........................     2.1(b)
"Global Notes"..........................     2.1(a)
"IAI Global Note".......................     2.1(a)
"Permanent Regulation S Global Note"....     2.1(a)
"Regulation S"..........................     2.1(a)
"Regulation S Global Note"..............     2.1(a)
"Rule 144A".............................     2.1(a)
"Rule 144A Global Note".................     2.1(a)
"Temporary Regulation S Global Note"....     2.1(a)


     2. The Notes.

     2.1 (a) Form and Dating. The Initial Notes will be offered and sold by the
Company pursuant to a Purchase Agreement. The Initial Notes will be resold
initially only to (i) QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation
S) in reliance on Regulation S under the Securities Act ("Regulation S").
Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and
purchasers in reliance on Regulation S, subject to the restrictions on transfer
set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be
issued initially in the form of one or more permanent



                                                                               7


global Notes in definitive, fully registered form (collectively, the "Rule 144A
Global Note"); Initial Notes initially resold to IAIs shall be issued initially
in the form of one or more permanent global Notes in definitive, fully
registered form (collectively, the "IAI Global Note"); and Initial Notes
initially resold pursuant to Regulation S shall be issued initially in the form
of one or more temporary global securities in fully registered form
(collectively, the "Temporary Regulation S Global Note"), in each case without
interest coupons and with the global securities legend and the applicable
restricted securities legend set forth in Exhibit 1 hereto, which shall be
deposited on behalf of the purchasers of the Initial Notes represented thereby
with the Notes Custodian and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in this Indenture. Except as set forth in this Section
2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note
will not be exchangeable for interests in the Rule 144A Global Note, the IAI
Global Note, a permanent global security (the "Permanent Regulation S Global
Note", and together with the Temporary Regulation S Global Note, the "Regulation
S Global Note") or any other Note prior to the expiration of the Distribution
Compliance Period and then, after the expiration of the Distribution Compliance
Period, may be exchanged for interests in a Rule 144A Global Note, an IAI Global
Note or the Permanent Regulation S Global Note only upon certification in form
reasonably satisfactory to the Trustee that (i) beneficial ownership interests
in such Temporary Regulation S Global Note are owned either by non-U.S. persons
or U.S. persons who purchased such interests in a transaction that did not
require registration under the Securities Act and (ii) in the case of an
exchange for an IAI Global Note, certification that the interest in the
Temporary Regulation S Global Note is being transferred to an institutional
"accredited investor" (as defined under the Securities Act) that is acquiring
the securities for its own account or for the account of an institutional
accredited investor.

          Beneficial interests in Temporary Regulation S Global Notes or IAI
Global Notes may be exchanged for interests in Rule 144A Global Notes if (1)
such exchange occurs in connection with a transfer of Notes in compliance with
Rule 144A and (2) the transferor of the beneficial interest in the Temporary
Regulation S Global Note or the IAI Global Note, as applicable, first delivers
to the Trustee a written certificate (in a form satisfactory to the Trustee) to
the effect that the beneficial interest in the Temporary Regulation S Global
Note or the IAI Global Note, as applicable, is being transferred to a Person (a)
who the transferor reasonably believes to be a QIB, (b) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A, and (c) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.

          Beneficial interests in Temporary Regulation S Global Notes and Rule
144A Global Notes may be exchanged for an interest in IAI Global Notes if (1)
such exchange occurs in connection with a transfer of the securities in
compliance with an exemption under the Securities Act and (2) the transferor of
the Regulation S Global Note or Rule 144A Global Note, as applicable, first
delivers to the trustee a written certificate (substantially in the form of
Exhibit 2) to the effect that (A) the Regulation S Global Note or Rule 144A
Global Note, as applicable, is being transferred (a) to an "accredited investor"
within the meaning of 501(a)(1),(2),(3) and (7) under the Securities Act that is



                                                                               8


an institutional investor acquiring the securities for its own account or for
the account of such an institutional accredited investor, in each case in a
minimum principal amount of the securities of $250,000, for investment purposes
and not with a view to or for offer or sale in connection with any distribution
in violation of the Securities Act and (B) in accordance with all applicable
securities laws of the States of the United States and other jurisdictions.

          Beneficial interests in a Rule 144A Global Note or an IAI Global Note
may be transferred to a Person who takes delivery in the form of an interest in
a Regulation S Global Note, whether before or after the expiration of the
Distribution Compliance Period, only if the transferor first delivers to the
Trustee a written certificate (in the form provided in the Indenture) to the
effect that such transfer is being made in accordance with Rule 903 or 904 of
Regulation S or Rule 144 (if applicable).

          The Rule 144A Global Note, the IAI Global Note, the Temporary
Regulation S Global Note and the Permanent Regulation S Global Note are
collectively referred to herein as "Global Notes". The aggregate principal
amount of the Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its nominee
as hereinafter provided.

          (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Note deposited with or on behalf of the Depository.

          The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depository for such Global Note
or Global Notes or the nominee of such Depository and (b) shall be delivered by
the Trustee to such Depository or pursuant to such Depository's instructions or
held by the Trustee as custodian for the Depository.

          Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Note, and the Company, the Trustee and any agent
of the Company or the Trustee shall be entitled to treat the Depository as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Note.

          (c) Definitive Notes. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be
entitled to receive physical delivery of Definitive Notes.



                                                                               9


     2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the
Issue Date, an aggregate principal amount of $200 million 11% Senior
Subordinated Notes Due 2014, (2) any Additional Notes for an original issue in
an aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or Private
Exchange Notes for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Notes in each case upon a written order of the
Company signed by at least one Officer of the Company. Such order shall specify
the amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated and, in the case of any issuance of
Additional Notes pursuant to Section 2.14 of the Indenture, shall certify that
such issuance is in compliance with Section 4.03 of the Indenture.

     2.3 Transfer and Exchange.

          (a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented to the Registrar with a request:

          (x)  to register the transfer of such Definitive Notes; or

          (y)  to exchange such Definitive Notes for an equal principal amount
               of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Notes surrendered for transfer or exchange:

          (i) shall be duly endorsed or accompanied by a written instrument of
     transfer in form reasonably satisfactory to the Company and the Registrar,
     duly executed by the Holder thereof or its attorney duly authorized in
     writing; and

          (ii) if such Definitive Notes are not required to bear a restricted
     securities legend, they are being transferred or exchanged pursuant to an
     effective registration statement under the Securities Act, pursuant to
     Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are
     accompanied by the following additional information and documents, as
     applicable:

               (a) if such Definitive Notes are being delivered to the Registrar
          by a Holder for registration in the name of such Holder, without
          transfer, a certification from such Holder to that effect; or

               (b) if such Definitive Notes are being transferred to the
          Company, a certification to that effect; or

               (c) if such Definitive Notes are being transferred (x) pursuant
          to an exemption from registration in accordance with Rule 144A,
          Regulation S or Rule 144 under the Securities Act; or (y) in reliance
          upon another



                                                                              10


          exemption from the requirements of the Securities Act: (i) a
          certification to that effect (in the form set forth on the reverse of
          the Note) and (ii) if the Company so requests, an opinion of counsel
          or other evidence reasonably satisfactory to it as to the compliance
          with the restrictions set forth in the legend set forth in Section
          2.3(e)(i).

          (b) Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a Rule 144A Global Note, an IAI Global Note or a
Permanent Regulation S Global Note except upon satisfaction of the requirements
set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:

                    (i) certification, in the form set forth on the reverse of
               the Note, that such Definitive Note is either (A) being
               transferred to a QIB in accordance with Rule 144A, (B) being
               transferred to an IAI or (C) being transferred after expiration
               of the Distribution Compliance Period by a Person who initially
               purchased such Note in reliance on Regulation S to a buyer who
               elects to hold its interest in such Note in the form of a
               beneficial interest in the Permanent Regulation S Global Note;
               and

                    (ii) written instructions directing the Trustee to make, or
               to direct the Notes Custodian to make, an adjustment on its books
               and records with respect to such Rule 144A Global Note (in the
               case of a transfer pursuant to clause (b)(i)(A)), IAI Global Note
               (in the case of a transfer pursuant to clause (b)(1)(B)) or
               Permanent Regulation S Global Note (in the case of a transfer
               pursuant to clause (b)(i)(B)) to reflect an increase in the
               aggregate principal amount of the Notes represented by the Rule
               144A Global Note, IAI Global Note or Permanent Regulation S
               Global Note, as applicable, such instructions to contain
               information regarding the Depository account to be credited with
               such increase,

then the Trustee shall cancel such Definitive Note and cause, or direct the
Notes Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Notes Custodian, the
aggregate principal amount of Notes represented by the Rule 144A Global Note,
IAI Global Note or Permanent Regulation S Global Note, as applicable, to be
increased by the aggregate principal amount of the Definitive Note to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Note, IAI Global Note or Permanent Regulation S Global Note, as applicable,
equal to the principal amount of the Definitive Note so canceled. If no Rule
144A Global Notes, IAI Global Notes or Permanent Regulation S Global Notes, as
applicable, are then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate of



                                                                              11


the Company, a new Rule 144A Global Note, IAI Global Note or Permanent
Regulation S Global Note, as applicable, in the appropriate principal amount.

          (c) Transfer and Exchange of Global Notes.

                    (i) The transfer and exchange of Global Notes or beneficial
               interests therein shall be effected through the Depository, in
               accordance with this Indenture (including applicable restrictions
               on transfer set forth herein, if any) and the procedures of the
               Depository therefor. A transferor of a beneficial interest in a
               Global Note shall deliver to the Registrar a written order given
               in accordance with the Depository's procedures containing
               information regarding the participant account of the Depository
               to be credited with a beneficial interest in the Global Note. The
               Registrar shall, in accordance with such instructions instruct
               the Depository to credit to the account of the Person specified
               in such instructions a beneficial interest in the Global Note and
               to debit the account of the Person making the transfer the
               beneficial interest in the Global Note being transferred.

                    (ii) If the proposed transfer is a transfer of a beneficial
               interest in one Global Note to a beneficial interest in another
               Global Note, the Registrar shall reflect on its books and records
               the date and an increase in the principal amount of the Global
               Note to which such interest is being transferred in an amount
               equal to the principal amount of the interest to be so
               transferred, and the Registrar shall reflect on its books and
               records the date and a corresponding decrease in the principal
               amount of the Global Note from which such interest is being
               transferred.

                    (iii) Notwithstanding any other provisions of this Appendix
               (other than the provisions set forth in Section 2.4), a Global
               Note may not be transferred as a whole except by the Depository
               to a nominee of the Depository or by a nominee of the Depository
               to the Depository or another nominee of the Depository or by the
               Depository or any such nominee to a successor Depository or a
               nominee of such successor Depository.

                    (iv) In the event that (a) Global Note is exchanged for
               Definitive Notes pursuant to Section 2.4 of this Appendix, prior
               to the consummation of a Registered Exchange Offer or the
               effectiveness of a Shelf Registration Statement with respect to
               such Notes, such Notes may be exchanged only in accordance with
               such procedures as are substantially consistent with the
               provisions of this Section 2.3 (including the certification
               requirements set forth on the reverse of the Initial Notes
               intended to ensure that such transfers comply with Rule 144A,
               Regulation S or another



                                                                              12


               applicable exemption under the Securities Act, as the case may
               be) and such other procedures as may from time to time be adopted
               by the Company.

          (d) Restrictions on Transfer of Temporary Regulation S Global Notes.
During the Distribution Compliance Period, beneficial ownership interests in
Temporary Regulation S Global Notes may only be sold, pledged or transferred in
accordance with the Applicable Procedures and only (i) to the Company, (ii) in
an offshore transaction in accordance with Regulation S (other than a
transaction resulting in an exchange for an interest in a Permanent Regulation S
Global Note), (iii) pursuant to Section 2.1 or (iv) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any State of the United States.

          (e) Legend.

                    (i) Except as permitted by the following paragraphs (ii),
               (iii) and (iv), each Note certificate evidencing the Global Notes
               (and all Notes issued in exchange therefor or in substitution
               thereof), in the case of Notes offered otherwise than in reliance
               on Regulation S shall bear a legend in substantially the
               following form:

               THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
               TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
               SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
               THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
               THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
               THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
               THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
               PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
               144A THEREUNDER.

               THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
               THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
               TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE
               SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
               DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
               MEETING THE REQUIREMENTS OF RULE 144A, (II) TO AN "ACCREDITED
               INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) OF
               REGULATION D UNDER THE SECURITIES ACT THAT,



                                                                              13


               PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
               CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
               TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE
               TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
               PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
               COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
               COMPLIANCE WITH THE SECURITIES ACT, (III) OUTSIDE THE UNITED
               STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
               UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION FROM
               REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
               THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
               REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
               (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
               OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
               EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
               THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
               ABOVE.

          Each certificate evidencing a Note offered in reliance on Regulation S
     shall, in addition to the foregoing, bear a legend in substantially the
     following form:

               THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
               TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S.
               SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
               MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE
               ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN
               AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
               SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS
               USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER
               THE SECURITIES ACT.

          Each Definitive Note shall also bear the following additional legend:

               IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
               REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
               INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY



                                                                              14


               REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
               RESTRICTIONS.

                    (ii) Upon any sale or transfer of a Transfer Restricted Note
               (including any Transfer Restricted Note represented by a Global
               Note) pursuant to Rule 144 under the Securities Act, the
               Registrar shall permit the transferee thereof to exchange such
               Transfer Restricted Note for a certificated Note that does not
               bear the legend set forth above and rescind any restriction on
               the transfer of such Transfer Restricted Note, if the transferor
               thereof certifies in writing to the Registrar that such sale or
               transfer was made in reliance on Rule 144 (such certification to
               be in the form set forth on the reverse of the Note).

                    (iii) After a transfer of any Initial Notes or Private
               Exchange Notes pursuant to and during the period of the
               effectiveness of a Shelf Registration Statement with respect to
               such Initial Notes or Private Exchange Notes, as the case may be,
               all requirements pertaining to legends on such Initial Note or
               such Private Exchange Note will cease to apply, the requirements
               requiring any such Initial Note or such Private Exchange Note
               issued to certain Holders be issued in global form will cease to
               apply, and a certificated Initial Note or Private Exchange Note
               or an Initial Note or Private Exchange Note in global form, in
               each case without restrictive transfer legends, will be available
               to the transferee of the Holder of such Initial Notes or Private
               Exchange Notes upon exchange of such transferring Holder's
               certificated Initial Note or Private Exchange Note or directions
               to transfer such Holder's interest in the Global Note, as
               applicable.

                    (iv) Upon the consummation of a Registered Exchange Offer
               with respect to the Initial Notes, all requirements pertaining to
               such Initial Notes that Initial Notes issued to certain Holders
               be issued in global form will still apply with respect to Holders
               of such Initial Notes that do not exchange their Initial Notes,
               and Exchange Notes in certificated or global form, in each case
               without the restricted securities legend set forth in Exhibit 1
               hereto will be available to Holders that exchange such Initial
               Notes in such Registered Exchange Offer.

                    (v) Upon the consummation of a Private Exchange with respect
               to the Initial Notes, all requirements pertaining to such Initial
               Notes that Initial Notes issued to certain Holders be issued in
               global form will still apply with respect to Holders of such
               Initial Notes that do not exchange their Initial Notes, and
               Private Exchange Notes in global form with the global securities
               legend and the applicable restricted securities legend set forth
               in Exhibit 1



                                                                              15

               hereto will be available to Holders that exchange such Initial
               Notes in such Private Exchange.

          (f) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive
Notes, redeemed, purchased or canceled, such Global Note shall be returned to
the Depository for cancellation or retained and canceled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Notes Custodian for such Global Note) with respect to such Global Note, by
the Trustee or the Notes Custodian, to reflect such reduction.

          (g) No Obligation of the Trustee.

                    (i) The Trustee shall have no responsibility or obligation
               to any beneficial owner of a Global Note, a member of, or a
               participant in the Depository or other Person with respect to the
               accuracy of the records of the Depository or its nominee or of
               any participant or member thereof, with respect to any ownership
               interest in the Notes or with respect to the delivery to any
               participant, member, beneficial owner or other Person (other than
               the Depository) of any notice (including any notice of
               redemption) or the payment of any amount, under or with respect
               to such Notes. All notices and communications to be given to the
               Holders and all payments to be made to Holders under the Notes
               shall be given or made only to or upon the order of the
               registered Holders (which shall be the Depository or its nominee
               in the case of a Global Note). The rights of beneficial owners in
               any Global Note shall be exercised only through the Depository
               subject to the applicable rules and procedures of the Depository.
               The Trustee may rely and shall be fully protected in relying upon
               information furnished by the Depository with respect to its
               members, participants and any beneficial owners.

                    (ii) The Trustee shall have no obligation or duty to
               monitor, determine or inquire as to compliance with any
               restrictions on transfer imposed under this Indenture or under
               applicable law with respect to any transfer of any interest in
               any Note (including any transfers between or among Depository
               participants, members or beneficial owners in any Global Note)
               other than to require delivery of such certificates and other
               documentation or evidence as are expressly required by, and to do
               so if and when expressly required by, the terms of this
               Indenture, and to examine the same to determine substantial
               compliance as to form with the express requirements hereof.



                                                                              16


          2.4 Definitive Notes.

          (a) A Global Note deposited with the Depository or with the Trustee as
Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred
to the beneficial owners thereof in the form of Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.3 hereof and
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Note and the Depository fails to appoint
a successor depository or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act, in either case, and a
successor depository is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing or (iii) the
Company, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of Definitive Notes under this Indenture.

          (b) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depository to
the Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal aggregate
principal amount of Definitive Notes of authorized denominations. Any portion of
a Global Note transferred pursuant to this Section 2.4 shall be executed,
authenticated and delivered only in denominations of $2,000 principal amount and
any integral multiples of $1,000 in excess of $2,000 and registered in such
names as the Depository shall direct. Any Definitive Note delivered in exchange
for an interest in the Transfer Restricted Note shall, except as otherwise
provided by Section 2.3(e) hereof, bear the applicable restricted securities
legend and definitive securities legend set forth in Exhibit 1 hereto.

          (c) Subject to the provisions of Section 2.4(b) hereof, the registered
Holder of a Global Note shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.

          (d) In the event of the occurrence of one of the events specified in
Section 2.4(a) hereof, the Company shall promptly make available to the Trustee
a reasonable supply of Definitive Notes in definitive, fully registered form
without interest coupons. In the event that such Definitive Notes are not
issued, the Company expressly acknowledges, with respect to the right of any
Holder to pursue a remedy pursuant to Section 6.06 of this Indenture, the right
of any beneficial owner of Notes to pursue such remedy with respect to the
portion of the Global Note that represents such beneficial owner's Notes as if
such Definitive Notes had been issued.



                                                                       EXHIBIT 1
                                                                              to
                                             RULE 144A/REGULATION S/IAI APPENDIX

                         [FORM OF FACE OF INITIAL NOTE]

                              [Global Notes Legend]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

          [[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF
COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE
UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE
OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]

    [Restricted Notes Legend for Notes offered otherwise than in Reliance on
                                  Regulation S]

          THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.



                                                                               2


          THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (III) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

     [Restricted Notes Legend for Notes Offered in Reliance on Regulation S]

          THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE
THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

                   [Temporary Regulation S Global Note Legend]

          EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE
PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN
THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING
RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF



                                                                               3


THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY
ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (III) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

          AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR
INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN
CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE 144A AND
(2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE
A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT
THAT THE REGULATION S GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

          AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR
INTERESTS IN AN IAI GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION
WITH A TRANSFER OF THE NOTES IN COMPLIANCE WITH AN EXEMPTION UNDER THE
SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL NOTE IS BEING
TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1),(2),(3)



                                                                               4


OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.

          BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE OR AN IAI GLOBAL NOTE
MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN
THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904
OF REGULATION S OR RULE 144 (IF AVAILABLE).

                            [Definitive Notes Legend]

          IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.



                                                                               5


No. ______                                                                 $____

                     11% Senior Subordinated Notes Due 2014

          SHG Acquisition Corp. (the "Issuer"), a Delaware corporation, promises
to pay to [________________________________________], or registered assigns, the
principal sum of [_______________________] Dollars on January 15, 2015.

          Interest Payment Dates: January 15 and July 15.

          Record Dates: January 1 and July 1.

          Additional provisions of this Note are set forth on the other side of
this Note.

Dated: ____________________



                                                                               6


     IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually
or by facsimile by its duly authorized officers.

                                        SHG ACQUISITION CORP.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

The undersigned hereby acknowledges
and agrees that, upon the
effectiveness of the merger of SHG
Acquisition Corp. with and into
Skilled Healthcare Group, Inc., with
Skilled Healthcare Group, Inc.
continuing as the surviving
corporation, it shall succeed by
operation of law to all of the rights
and obligations of SHG Acquisition
Corp., set forth herein and that all
references to the "Issuer" shall
thereupon be deemed to be references
to the undersigned.

SKILLED HEALTHCARE GROUP, INC.

By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------



                                                                               7


TRUSTEE'S CERTIFICATE OF
   AUTHENTICATION

WELLS FARGO BANK, NATIONAL
   ASSOCIATION,
   as Trustee, certifies that this is
      one of the Notes referred to in
      the Indenture.


By:
    ---------------------------------
    Authorized Signatory



                                                                               8


                   [FORM OF REVERSE SIDE OF INITIAL SECURITY]

                      11% Senior Subordinated Note Due 2014

1. Interest

          SHG Acquisition Corp., a Delaware corporation that will be merged with
and into Skilled Healthcare Group, Inc., a Delaware corporation, with Skilled
Healthcare Group, Inc. continuing as the surviving corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Note at a rate of
$0.05 per week per $1,000 principal amount of Notes (increasing by an additional
$0.05 per week per $1,000 principal amount of Notes after each consecutive
90-day period that occurs after the date on which such Registration default
occurs up to a maximum additional interest rate of $0.30 per week per $1,000
principal amount of Notes) from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest
semiannually on January 15 and July 15 of each year, commencing July 15, 2006.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from December 27, 2005. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment

          The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the January 1 or July 1 next preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Company will make all payments in respect of a certificated Note (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Note
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).



                                                                               9


3. Paying Agent and Registrar

          Initially, Wells Fargo Bank, National Association (the "Trustee"),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

4. Indenture

          The Company issued the Notes under an Indenture dated as of December
27, 2005 (the "Indenture"), among the Company, the Trustee, and subsequent to
the Merger (as defined therein), Skilled Healthcare Group, Inc. and the
Subsidiary Guarantors. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.

          The Notes are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Notes pursuant to Section 2.14 of the Indenture.
The Initial Notes issued on the Issue Date, any Additional Notes and all
Exchange Notes or Private Exchange Notes issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase, capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.

5. Optional Redemption

          Except as set forth below, the Company shall not be entitled to redeem
the Notes.

          On and after January 15, 2010, the Company shall be entitled at its
option to redeem all or a portion of the Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on January 15 of the years set
forth below:



                                                                              10



                      Redemption
Period                   Price
- ------                ----------
                   
2010                    105.50%
2011                    102.75%
2012 and thereafter     100.00%


          In addition, prior to January 15, 2009, the Company shall be entitled
at its option on one or more occasions to redeem Notes (which includes
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of the Notes (which includes Additional Notes, if
any) issued at a redemption price (expressed as a percentage of principal
amount) of 111.00%, plus accrued and unpaid interest to the redemption date,
with the net cash proceeds from one or more Public Equity Offerings following
which there is a Public Market; provided, however, that (1) at least 65% of such
aggregate principal amount of Notes (which includes Additional Notes, if any)
remains outstanding immediately after the occurrence of each such redemption
(other than Notes held, directly or indirectly, by the Company or its
Affiliates); and (2) each such redemption occurs within 90 days after the date
of the related Public Equity Offering.

          Prior to January 15, 2010, the Company shall be entitled at its option
to redeem all, but not less than all, of the Notes at a redemption price equal
to 100.00% of the principal amount of the Notes plus the Applicable Premium as
of, and accrued and unpaid interest to, the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered address,
not less than 30 nor more than 60 days prior to the redemption date.

6. Notice of Redemption

          Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $2,000 principal amount
may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Notes (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.

7. Put Provisions

          Upon a Change of Control, any Holder of Notes will have the right to
cause the Company to repurchase all or any part of the Notes of such Holder at a
repurchase price equal to 101% of the principal amount of the Notes to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.



                                                                              11


8. Guaranty

          The payment by the Company of the principal of, and premium and
interest on, the Notes is fully and unconditionally guaranteed on a joint and
several senior subordinated basis by each of the Subsidiary Guarantors to the
extent set forth in the Indenture.

9. Subordination

          The Notes are subordinated to Senior Indebtedness of the Company and
the Subsidiary Guarantors on the terms and subject to the conditions set forth
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Notes may be paid. Each Noteholder by accepting a Note
agrees to the subordination provisions contained in the Indenture and authorizes
the Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.

10. Denominations; Transfer; Exchange

          The Notes are in registered form without coupons in denominations of
$2,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed or 15 days before an interest payment
date.

11. Persons Deemed Owners

          The registered Holder of this Note may be treated as the owner of it
for all purposes.

12. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

13. Discharge and Defeasance

          Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Notes and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.



                                                                              12


14. Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount outstanding of the Notes and (b) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company, the Subsidiary Guarantors and the
Trustee shall be entitled to amend the Indenture or the Notes to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article Five of
the Indenture, or to provide for uncertificated Notes in addition to or in place
of certificated Notes, or to add guarantees with respect to the Notes, including
Subsidiary Guaranties, or to secure the Notes, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
Guarantors, or to comply with any requirement of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Noteholder, or to make amendments to
provisions of the Indenture relating to the form, authentication, transfer and
legending of the Notes, or to conform the text of the Indenture or the Notes to
any provision set forth in the offering circular, dated December 14, 2005,
relating to the Notes, or to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture as of the date of the
Indenture.

15. Defaults and Remedies

          Under the Indenture, Events of Default include: default for 30 days in
payment of interest on the Notes; default in payment of principal on the Notes
at maturity, upon redemption pursuant to paragraph 5 of the Notes, upon
acceleration or otherwise, or failure by the Company to redeem or purchase Notes
when required; failure by the Company or any Subsidiary Guarantor to comply with
other agreements in the Indenture or the Notes, in certain cases subject to
notice and lapse of time; certain accelerations (including failure to pay within
any grace period after final maturity) of other Indebtedness of the Company, any
Subsidiary Guarantor or any Significant Subsidiary if the amount accelerated (or
so unpaid) exceeds $15.0 million; certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; certain judgments
or decrees for the payment of money in excess of $15.0 million; and certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Notes may declare all the Notes to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default.

          Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity or security satisfactory to it. Subject
to certain limitations, Holders of a majority in principal amount of the Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of



                                                                              13


any continuing Default (except a Default in payment of principal or interest) if
it determines that withholding notice is in the interest of the Holders.

16. Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.

17. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of
the Company under the Notes or the Indenture or of such Subsidiary Guarantor
under its Subsidiary Guaranty or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Note, each Noteholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.

18. Authentication

          This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.

19. Abbreviations

          Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

20. CUSIP Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

21. Holders' Compliance with Registration Rights Agreement

          Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including the
obligations of the



                                                                              14


Holders with respect to a registration and the indemnification of the Company to
the extent provided therein.

22. Governing Law

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

          The Company will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:

          SHG Acquisition Corp.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, CA 92610
          Attention: General Counsel


                                                                              15


                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

________________________________________________________________________________
             (Print or type assignee's name, address and zip code)

________________________________________________________________________________
                 (Insert assignee's soc. sec. or tax I.D. No.)


and irrevocably appoint ________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.

________________________________________________________________________________

Date:                                   Your Signature:
      ---------------------                             ------------------------


- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.

In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Notes and the last date, if any, on which such Notes were owned by the
Company or any Affiliate of the Company, the undersigned confirms that such
Notes are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

     [ ]  to the Company; or

(1)  [ ]  pursuant to an effective registration statement under the Securities
          Act of 1933; or

(2)  [ ]  inside the United States to a "qualified institutional buyer" (as
          defined in Rule 144A under the Securities Act of 1933) that purchases
          for its own account or for the account of a qualified institutional
          buyer to whom notice is given that such transfer is being made in
          reliance on Rule 144A, in each case pursuant to and in compliance with
          Rule 144A under the Securities Act of 1933; or

(3)  [ ]  outside the United States in an offshore transaction within the
          meaning of Regulation S under the Securities Act in compliance with
          Rule 904 under the Securities Act of 1933; or



                                                                              16


(4)  [ ]  pursuant to the exemption from registration provided by Rule 144 under
          the Securities Act of 1933; or

(5)  [ ]  to an institutional "accredited investor" (as defined in Rule
          501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has
          furnished to the Trustee a signed letter containing certain
          representations and agreements.

          Unless one of the boxes is checked, the Trustee will refuse to
          register any of the Notes evidenced by this certificate in the name of
          any person other than the registered holder thereof; provided,
          however, that if box (4) is checked, the Trustee shall be entitled to
          require, prior to registering any such transfer of the Notes, such
          legal opinions, certifications and other information as the Company
          has reasonably requested to confirm that such transfer is being made
          pursuant to an exemption from, or in a transaction not subject to, the
          registration requirements of the Securities Act of 1933, such as the
          exemption provided by Rule 144 under such Act.


- -------------------------------------
Signature


Signature Guarantee:


- -------------------------------------   ----------------------------------------
Signature must be guaranteed            Signature



                                                                              17


     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Note Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.



                                                                              18


              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

          The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

Dated: ____________________             ________________________________________
                                        Notice: To be executed by
                                                an executive officer



                                                                              19


                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

     The following increases or decreases in this Global Note have been made:



                                                        Principal amount of        Signature of
            Amount of decrease    Amount of increase      this Global Note      authorized officer
 Date of   in Principal amount   in Principal amount       following such      of Trustee or Notes
Exchange   of this Global Note   of this Global Note   decrease or increase)        Custodian
- --------   -------------------   -------------------   ---------------------   -------------------
                                                                   





                                                                              20


                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Note purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box: [ ]

          If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.06 or 4.10 of the Indenture, state the amount in
principal amount: $___________

Dated:                                  Your Signature:
       -------------------                              ------------------------
                                                        (Sign exactly as your
                                                        name appears on the
                                                        other side of this
                                                        Note.)

Signature Guarantee:
                     -----------------------------------------------------------
                                   (Signature must be guaranteed)

     Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Note Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


                                                                       EXHIBIT A

                         [FORM OF FACE OF EXCHANGE NOTE
                         OR PRIVATE EXCHANGE NOTE]*/**/

- ----------
*/   [If the Note is to be issued in global form add the Global Notes Legend
     from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
     captioned "[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR
     DECREASES IN GLOBAL NOTE".] [Note: Include asterisk and this note if a 144A
     Offering with registration rights]

**/  [If the Note is a Private Exchange Note issued in a Private Exchange to an
     Initial Purchaser holding an unsold portion of its initial allotment, add
     the Restricted Notes Legend from Exhibit 1 to Appendix A and replace the
     Assignment Form included in this Exhibit A with the Assignment Form
     included in such Exhibit 1.] [Note: Include asterisk and this note if a
     144A Offering with registration rights]



                                                                               2


No. __________                                                       $__________

                     11% Senior Subordinated Notes Due 2014

     Skilled Healthcare Group, Inc., a Delaware corporation, promises to pay to
___________________________________________, or registered assigns, the
principal sum of ____________ Dollars on January 15, 2014.

     Interest Payment Dates: January 15 and July 15.

     Record Dates: January 1 and July 1.

     Additional provisions of this Note are set forth on the other side of this
Note.

Dated:
       ------------------------------

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By
                                           -------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee, certifies that this is
one of the Notes referred to in the
Indenture.


By
   ----------------------------------
   Authorized Signatory



                                                                               3


                     [FORM OF REVERSE SIDE OF EXCHANGE NOTE
                            OR PRIVATE EXCHANGE NOTE]

                      11% Senior Subordinated Note Due 2014

1. Interest

          Skilled Healthcare Group, Inc., a Delaware corporation, (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above[; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Note at a rate of
$0.05 per week per $1,000 principal amount of Notes (increasing by an additional
$0.05 per week per $1,000 principal amount of Notes after each consecutive
90-day period that occurs after the date on which such Registration default
occurs up to a maximum additional interest rate of $0.30 per week per $1,000
principal amount of Notes) from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured.](1) The Company will pay interest
semiannually on January 15 and July 15 of each year, commencing July 15, 2006.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from December 27, 2005. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment

          The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the January 1 or July 1 next preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Notes represented by a Global Note (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Company will make all payments in respect of a certificated Note (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Note
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).

- ----------
(1)  Insert if at the date of issuance of the Exchange Note or Private Exchange
     Note (as the case may be), any Registration Default has occurred with
     respect to the related Initial Notes during the interest period in which
     such date of issuance occurs.



                                                                               4


3. Paying Agent and Registrar

          Initially, Wells Fargo Bank, National Association (the "Trustee"),
will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of
its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.

4. Indenture

          The Company issued the Notes under an Indenture dated as of December
27, 2005 (the "Indenture"), among the Company, the Trustee, and subsequent to
the Merger (as defined therein), Skilled Healthcare Group, Inc. and the
Subsidiary Guarantors. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.

          The Notes are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Notes pursuant to Section 2.14 of the Indenture.
The Initial Notes issued on the Issue Date, any Additional Notes and all
Exchange Notes or Private Exchange Notes issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase, capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.

5. Optional Redemption

          Except as set forth below, the Company shall not be entitled to redeem
the Notes.

          On and after January 15, 2010, the Company shall be entitled at its
option to redeem all or a portion of the Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on January 15 of the years set
forth below:



                                                                               5




                      Redemption
Period                   Price
- ------                ----------
                   
2010                    105.50%
2011                    102.75%
2012 and thereafter     100.00%


          In addition, prior to January 15, 2009, the Company shall be entitled
at its option on one or more occasions to redeem Notes (which includes
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of the Notes (which includes Additional Notes, if
any) issued at a redemption price (expressed as a percentage of principal
amount) of 111.00%, plus accrued and unpaid interest to the redemption date,
with the net cash proceeds from one or more Public Equity Offerings; provided,
however, that (1) at least 65% of such aggregate principal amount of Notes
(which includes Additional Notes, if any) remains outstanding immediately after
the occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 90 days after the date of the related Public Equity Offering.

          Prior to January 15, 2010, the Company shall be entitled at its option
to redeem all, but not less than all, of the Notes at a redemption price equal
to 100.00% of the principal amount of the Notes plus the Applicable Premium as
of, and accrued and unpaid interest to, the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered address,
not less than 30 nor more than 60 days prior to the redemption date.

6. Notice of Redemption

          Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $2,000 principal amount
may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Notes (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.

7. Put Provisions

          Upon a Change of Control, any Holder of Notes will have the right to
cause the Company to repurchase all or any part of the Notes of such Holder at a
repurchase price equal to 101% of the principal amount of the Notes to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on



                                                                               6


the relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.

8. Guaranty

          The payment by the Company of the principal of, and premium and
interest on, the Notes is fully and unconditionally guaranteed on a joint and
several senior subordinated basis by each of the Subsidiary Guarantors to the
extent set forth in the Indenture.

9. Subordination

          The Notes are subordinated to Senior Indebtedness of the Company and
the Subsidiary Guarantors on the terms and subject to the conditions set forth
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Notes may be paid. Each Noteholder by accepting a Note
agrees to the subordination provisions contained in the Indenture and authorizes
the Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.

10. Denominations; Transfer; Exchange

          The Notes are in registered form without coupons in denominations of
$2,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Notes
selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed or 15 days before an interest payment
date.

11. Persons Deemed Owners

          The registered Holder of this Note may be treated as the owner of it
for all purposes.

12. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

13. Discharge and Defeasance

          Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Notes and the
Indenture if the Company



                                                                               7


deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Notes to redemption or maturity, as the case
may be.

14. Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount outstanding of the Notes and (b) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company, the Subsidiary Guarantors and the
Trustee shall be entitled to amend the Indenture or the Notes to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article Five of
the Indenture, or to provide for uncertificated Notes in addition to or in place
of certificated Notes, or to add guarantees with respect to the Notes, including
Subsidiary Guaranties, or to secure the Notes, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
Guarantors, or to comply with any requirement of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Noteholder, or to make amendments to
provisions of the Indenture relating to the form, authentication, transfer and
legending of the Notes, or to conform the text of the Indenture or the Notes to
any provision set forth in the offering circular, dated December 14, 2005
relating to the Notes, or to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture as of the date of the
Indenture.

15. Defaults and Remedies

          Under the Indenture, Events of Default include: default for 30 days in
payment of interest on the Notes; default in payment of principal on the Notes
at maturity, upon redemption pursuant to paragraph 5 of the Notes, upon
acceleration or otherwise, or failure by the Company to redeem or purchase Notes
when required; failure by the Company or any Subsidiary Guarantor to comply with
other agreements in the Indenture or the Notes, in certain cases subject to
notice and lapse of time; certain accelerations (including failure to pay within
any grace period after final maturity) of other Indebtedness of the Company, any
Subsidiary Guarantor or any Significant Subsidiary if the amount accelerated (or
so unpaid) exceeds $15.0 million; certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; certain judgments
or decrees for the payment of money in excess of $15.0 million; and certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Notes may declare all the Notes to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default.

          Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes



                                                                               8


unless it receives indemnity or security satisfactory to it. Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Noteholders notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in the
interest of the Holders.

16. Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.

17. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of
the Company under the Notes or the Indenture or of such Subsidiary Guarantor
under its Subsidiary Guaranty or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Note, each Noteholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes.

18. Authentication

          This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Note.

19. Abbreviations

          Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

20. CUSIP Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures the Company has caused CUSIP numbers to be
printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.



                                                                               9


21. Holders' Compliance with Registration Rights Agreement

          Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

22. Governing Law

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

          The Company will furnish to any Noteholder upon written request and
without charge to the Noteholder a copy of the Indenture which has in it the
text of this Note in larger type. Requests may be made to:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway, Suite 200
          Foothill Ranch, CA 92610
          Attention: General Counsel



                                                                              10


                                 ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

________________________________________________________________________________
             (Print or type assignee's name, address and zip code)

________________________________________________________________________________
                 (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint ____________ agent to transfer this Note on the books of
the Company. The agent may substitute another to act for him.


Date:                                   Your Signature:
      -------------------------------                   ------------------------


- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.



                       OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Note purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box: [ ]

          If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.06 or 4.10 of the Indenture, state the amount in
principal amount: $[__________]


Dated:                                  Your Signature:
       ------------------------------                   ------------------------
                                                        (Sign exactly as your
                                                        name appears on the
                                                        other side of this
                                                        Note.)


Signature Guarantee:
                     -------------------------------------------------------
                                  (Signature must be guaranteed)

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Note Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.



                                                                       EXHIBIT 2
                                                                              to
                                             RULE 144A/REGULATION S/IAI APPENDIX

                                     Form of
                       Transferee Letter of Representation

Skilled Healthcare Group, Inc.

In care of
[__________]
[__________]
[__________]

Ladies and Gentlemen:

     This certificate is delivered to request a transfer of $[ ] principal
amount of the 11% Senior Subordinated due 2014 (the "Notes") of Skilled
Healthcare Group, Inc. (the "Company").

     Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:

Name: _______________________________

Address: ____________________________

Taxpayer ID Number: _________________

     The undersigned represents and warrants to you that:

     1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We, and any accounts for which we are acting, are each able to bear
the economic risk of our or its investment.

     2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date that is



                                                                               2


two years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such Notes
(or any predecessor thereto) (the "Resale Restriction Termination Date") only
(i) to the Company, (ii) in the United States to a person whom the seller
reasonably believes is a qualified institutional buyer in a transaction meeting
the requirements of Rule 144A, (iii) to an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that is an institutional accredited investor purchasing for its own account or
for the account of an institutional accredited investor, in each case in a
minimum principal amount of the Notes of $250,000, (iv) outside the United
States in a transaction complying with the provisions of Rule 904 under the
Securities Act, (v) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available) or (vi) pursuant to an
effective registration statement under the Securities Act, in each of cases (i)
through (vi) subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Notes is proposed to be made pursuant to clause (iii) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (iii), (iv) or (v) above to
require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Company and the Trustee.

                                        TRANSFEREE: _________________,


                                        by:
                                            ------------------------------------

EX-4.3

                                                                     Exhibit 4.3

                                  $200,000,000

                             SHG ACQUISITION CORP.

                     11% SENIOR SUBORDINATED NOTES DUE 2014
                                TO BE ASSUMED BY
                         SKILLED HEALTHCARE GROUP, INC.

                         REGISTRATION RIGHTS AGREEMENT

                                                               December 27, 2005

CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.
  c/o Credit Suisse First Boston LLC,
    Eleven Madison Avenue,
      New York, N.Y. 10010-3629

            Dear Sirs:

            SHG Acquisition Corp., a Delaware corporation (the "MERGER SUB"),
      proposes to issue and sell to Credit Suisse First Boston LLC and J.P.
      Morgan Securities Inc. (collectively, the "INITIAL PURCHASERS"), upon the
      terms set forth in a purchase agreement dated December 14, 2005 (the
      "PURCHASE AGREEMENT"), $200,000,000 aggregate principal amount of its 11%
      Senior Subordinated Notes (the "INITIAL NOTES") to be unconditionally
      guaranteed (the "GUARANTIES") immediately following the Merger (as defined
      in the Purchase Agreement) by each of the domestic subsidiary guarantors
      listed in Schedule I hereto, (the "GUARANTORS" and together with the
      Issuer (as defined below), the "COMPANY"). As used in this Agreement, the
      term "ISSUER" means, prior to the Merger, Merger Sub and, thereafter,
      Skilled Healthcare Group Inc., a Delaware corporation, the surviving
      entity after the Merger. The Initial Notes will be issued pursuant to an
      Indenture, dated as of December 27, 2005, (the "INDENTURE") among Merger
      Sub, Skilled Healthcare Group, Inc., the Guarantors named therein and
      Wells Fargo Bank, National Association, as trustee (the "TRUSTEE"). As an
      inducement to the Initial Purchasers, the Company agrees with the Initial
      Purchasers, for the benefit of the holders of the Initial Notes
      (including, without limitation, the Initial Purchasers), the Exchange
      Notes (as defined below) and the Private Exchange Notes (as defined below)
      (collectively the "HOLDERS"), as follows:

            1. Registered Exchange Offer. Unless not permitted by applicable law
(after the Company has complied with the ultimate paragraph of this Section 1),
the Company shall, at its own cost, prepare and, not later than 240 days after
(or if the 240th day is not a business day, the first business day thereafter)
(such 240th day, or the first business day thereafter, being an "Exchange Offer
Filing Deadline") after the date of original issue of the Initial Notes (the
"ISSUE DATE"), file with the Securities and Exchange Commission (the
"COMMISSION") a registration statement (the "EXCHANGE OFFER REGISTRATION
STATEMENT") on an appropriate form under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), with respect to a proposed offer (the "REGISTERED
EXCHANGE OFFER") to the Holders of Transfer Restricted Notes (as defined in
Section 6 hereof), who are not prohibited by any law or policy of the Commission
from participating in the Registered Exchange Offer, to issue and deliver to
such Holders, in exchange for the Initial Notes, a like aggregate principal
amount of debt securities (the "EXCHANGE NOTES") of the Company issued under the
Indenture and identical in all material respects to the Initial Notes (except
for the transfer restrictions relating to the Initial Notes and the provisions
relating to the matters described in Section 6 hereof) that would be registered
under the Securities Act. The Company shall use its reasonable best efforts to
(i) cause such Exchange Offer Registration Statement to become effective under
the Securities Act within 300 days (or if the 300th day is not a business day,
the first business day thereafter) after the Issue Date of the Initial Notes
(such 300th day, or the first business day thereafter, being an "EXCHANGE OFFER
EFFECTIVENESS DEADLINE") and (ii) keep the Exchange Offer Registration Statement
effective for not less than

30 days (or longer, if required by applicable law) after the date notice of the
Registered Exchange Offer is mailed to the Holders (such period being called the
"EXCHANGE OFFER REGISTRATION PERIOD").

            If the Company commences the Registered Exchange Offer, the Company
will be entitled to consummate the Registered Exchange Offer 30 days after such
commencement provided that the Company has accepted all the Initial Notes
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer.

            Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Notes (as defined in Section 6 hereof)
electing to exchange the Initial Notes for Exchange Notes (assuming that such
Holder is not an affiliate of the Company within the meaning of the Securities
Act, acquires the Exchange Notes in the ordinary course of such Holder's
business and has no arrangements with any person to participate in the
distribution of the Exchange Notes and is not prohibited by any law or policy of
the Commission from participating in the Registered Exchange Offer) to trade
such Exchange Notes from and after their receipt without any limitations or
restrictions under the Securities Act and without material restrictions under
the securities laws of the several states of the United States.

            The Company acknowledges that, pursuant to current interpretations
by the Commission's staff of Section 5 of the Securities Act, in the absence of
an applicable exemption therefrom, (i) each Holder which is a broker or dealer
registered under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") (a "BROKER-DEALER") electing to exchange Initial Notes, acquired for its
own account as a result of market making activities or other trading activities,
for Exchange Notes (an "EXCHANGING DEALER"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover of such
prospectus, (b) Annex B hereto in the "Exchange Offer Procedures" section of
such prospectus and the "Purpose of the Exchange Offer" section of such
prospectus, and (c) Annex C hereto in the "Plan of Distribution" section of such
prospectus in connection with a sale of any such Exchange Notes received by such
Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial
Purchaser that elects to sell Exchange Notes acquired in exchange for Initial
Notes constituting any portion of an unsold allotment is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with such sale. All
references in this Agreement to "PROSPECTUS" shall, except when the context
requires, include any prospectus (or amendment or supplement thereto) filed with
the Commission pursuant to Section 3 of this Agreement.

            The Company shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit such prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Notes; provided, however, that (i)
in the case where such prospectus and any amendment or supplement thereto must
be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall
be the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchasers have sold all Exchange Notes held by them (unless such period
is extended pursuant to Section 3(j) below) and (ii) the Company shall make such
prospectus and any amendment or supplement thereto, available to any
broker-dealer for use in connection with any resale of any Exchange Notes for a
period of not less than 90 days after the consummation of the Registered
Exchange Offer. If, upon consummation of the Registered Exchange Offer, any
Initial Purchaser holds Initial Notes acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Notes pursuant to the Registered Exchange Offer, shall issue and deliver to such
Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "PRIVATE EXCHANGE") for the Initial Notes held by such Initial
Purchaser, a like principal amount of debt securities of the Company issued
under the Indenture and identical in all material respects (including the
existence of restrictions on transfer under the Securities Act and the
securities laws of the several states of the United States, but excluding
provisions relating to the matters described in Section 6 (hereof) to the
Initial Notes (the "PRIVATE EXCHANGE NOTES"). The Initial Notes, the Exchange
Notes and the Private Exchange Notes are herein collectively called the "NOTES".

            In connection with the Registered Exchange Offer, the Company shall:



                                       2

            (a) mail to each Holder a copy of the prospectus forming part of the
      Exchange Offer Registration Statement, together with, if required by the
      Trustee for the Notes or the depository for the Notes, an appropriate
      letter of transmittal and related documents;

            (b) keep the Registered Exchange Offer open for not less than 30
      days (or longer, if required by applicable law) after the date notice
      thereof is mailed to the Holders;

            (c) utilize the services of a depositary for the Registered Exchange
      Offer with an address in the Borough of Manhattan, The City of New York,
      which may be the Trustee or an affiliate of the Trustee;

            (d) permit Holders to withdraw tendered Notes at any time prior to
      the close of business, New York time, on the last business day on which
      the Registered Exchange Offer shall remain open; and

            (e) otherwise comply with all applicable laws relating to the
      Exchange Offer.

            As soon as practicable after the close of the Registered Exchange
Offer or the Private Exchange, as the case may be, the Company shall:

            (x) accept for exchange all the Initial Notes validly tendered and
      not withdrawn pursuant to the Registered Exchange Offer and the Private
      Exchange;

            (y) deliver to the Trustee for cancellation all the Initial Notes so
      accepted for exchange; and

            (z) cause the Trustee to authenticate and deliver promptly to each
      Holder of the Initial Notes, Exchange Notes or Private Exchange Notes, as
      the case may be, equal in principal amount to the Initial Notes of such
      Holder so accepted for exchange.

            Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Initial Notes surrendered in exchange therefor or, if no interest has been
paid on the Initial Notes, from the Issue Date.

            Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Notes received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate in the distribution
of the Exchange Notes within the meaning of the Securities Act, (iii) such
Holder is not an "affiliate" of the Company as defined in Rule 405 of the
Securities Act, or if it is an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Exchange
Notes and (v) if such Holder is a broker-dealer, that it will receive Exchange
Notes for its own account in exchange for Initial Notes that were acquired as a
result of market-making activities or other trading activities and that it will
be required to deliver a prospectus in connection with any resale of such
Exchange Notes.

            Notwithstanding any other provisions hereof, but subject to Section
3(b) with respect to suspension, the Company will ensure that (i) any Exchange
Offer Registration Statement and any amendment thereto and any prospectus
forming part thereof and any supplement thereto complies in all material
respects with the Securities Act and the rules and regulations thereunder, (ii)
any Exchange Offer Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a


                                       3


material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

            2. Shelf Registration. If, (i) applicable interpretations of the
      staff of the Commission do not permit the Company to effect a Registered
      Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered
      Exchange Offer is not consummated within 330 days of the Issue Date, (iii)
      any Initial Purchaser shall notify the Company following consummation of
      the Registered Exchange Offer that the Initial Notes (or the Private
      Exchange Notes) held by it are not eligible to be exchanged for Exchange
      Notes in the Registered Exchange Offer or (iv) any Holder (other than an
      Exchanging Dealer) is prohibited by law or Commission policy from
      participating in the Registered Exchange Offer or, in the case of any
      Holder (other than an Exchanging Dealer) that participates in the
      Registered Exchange Offer, such Holder may not pursuant to the Securities
      Act resell the Exchange Notes acquired by it in the Registered Exchange
      Offer to the public without delivering a prospectus and such Holder so
      requests, the Company shall take the following actions:

            (a) The Company shall, at its cost, as promptly as practicable file
      with the Commission and thereafter shall use its reasonable best efforts
      to cause to be declared effective a registration statement (the "SHELF
      REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
      Statement, a "REGISTRATION STATEMENT"), (x) in the case of clause (i)
      above, on or prior to the 300th day after the Issue Date (or if the 300th
      day is not a business day, the first business day thereafter) and (y) in
      the case of clause (ii), (iii) or (iv) above, on or prior to the 60th day
      (or if the 60th day is not a business day, the first business day
      thereafter) after the date on which the Shelf Registration Statement is
      required to be filed (such 300th or 60th day, or the first business day
      thereafter, as the case may be, the "SHELF EFFECTIVENESS DEADLINE"), on an
      appropriate form under the Securities Act relating to the offer and sale
      of the Transfer Restricted Notes (as defined in Section 6 hereof) by the
      Holders thereof from time to time in accordance with the methods of
      distribution set forth in the Shelf Registration Statement and Rule 415
      under the Securities Act (hereinafter, the "SHELF REGISTRATION");
      provided, however, that no Holder (other than an Initial Purchaser) shall
      be entitled to have the Notes held by it covered by such Shelf
      Registration Statement unless such Holder agrees in writing to be bound by
      all the provisions of this Agreement applicable to such Holder.

            (b) The Company shall use its reasonable best efforts to keep the
      Shelf Registration Statement continuously effective in order to permit the
      prospectus included therein to be lawfully delivered by the Holders of the
      relevant Notes, for a period of two years (or for such longer period if
      extended pursuant to Section 3(j) below) from the Issue Date or such
      shorter period that will terminate when all the Notes covered by the Shelf
      Registration Statement (i) have been disposed of in accordance therewith
      or (ii) can be sold pursuant to Rule 144 under the Securities Act without
      any limitations under clauses (c),(e),(f) and (h) thereof. The Company
      shall be deemed not to have used its reasonable best efforts to keep the
      Shelf Registration Statement effective during the requisite period if it
      voluntarily takes any action that would result in Holders of Notes covered
      thereby not being able to offer and sell such Notes during that period,
      unless such action is required by applicable law.

            (c) Notwithstanding any other provisions of this Agreement to the
      contrary, the Company shall cause the Shelf Registration Statement and the
      related prospectus and any amendment or supplement thereto, as of each
      effective date of the Shelf Registration Statement, amendment or
      supplement, (i) to comply in all material respects with the applicable
      requirements of the Securities Act and the rules and regulations of the
      Commission and (ii) not to contain any untrue statement of a material fact
      or omit to state a material fact required to be stated therein or
      necessary in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading.


                                       4

            3. Registration Procedures. In connection with any Shelf
      Registration contemplated by Section 2 hereof and, to the extent
      applicable, any Registered Exchange Offer contemplated by Section 1
      hereof, the following provisions shall apply:

            (a) The Company shall (i) furnish to each Initial Purchaser, prior
      to the filing thereof with the Commission, a copy of the Registration
      Statement and each amendment thereof and each supplement, if any, to the
      prospectus included therein and, in the event that an Initial Purchaser
      (with respect to any portion of an unsold allotment from the original
      offering) is participating in the Registered Exchange Offer or the Shelf
      Registration Statement, the Company shall use its best efforts to reflect
      in each such document, when so filed with the Commission, such comments as
      such Initial Purchaser reasonably may propose; (ii) include the
      information set forth in Annex A hereto on the cover, in Annex B hereto in
      the "Exchange Offer Procedures" section and the "Purpose of the Exchange
      Offer" section and in Annex C hereto in the "Plan of Distribution" section
      of the prospectus forming a part of the Exchange Offer Registration
      Statement and include the information set forth in Annex D hereto in the
      Letter of Transmittal (or, if a Letter of Transmittal is not required by
      the Trustee for the Notes or the depository for the Notes, such other
      required documentation or communication) delivered pursuant to the
      Registered Exchange Offer; (iii) if requested by an Initial Purchaser,
      include the information required by Items 507 or 508 of Regulation S-K
      under the Securities Act, as applicable, in the prospectus forming a part
      of the Exchange Offer Registration Statement; (iv) include within the
      prospectus contained in the Exchange Offer Registration Statement a
      section entitled "Plan of Distribution," reasonably acceptable to the
      Initial Purchasers, which shall contain a summary statement of the
      positions taken or policies made by the staff of the Commission with
      respect to the potential "underwriter" status of any broker-dealer that is
      the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
      Exchange Notes to be received by such broker-dealer in the Registered
      Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions
      or policies have been publicly disseminated by the staff of the Commission
      or such positions or policies, in the reasonable judgment of the Initial
      Purchasers based upon advice of counsel (which may be in-house counsel),
      represent the prevailing views of the staff of the Commission; and (v) in
      the case of a Shelf Registration Statement, include in the prospectus
      included in the Shelf Registration Statement (or, if permitted, in a
      prospectus supplement that becomes a part thereof pursuant to Rule 430B(f)
      under the Securities Act) that is delivered to any Holder pursuant to
      Section 3(d) and (f) the names of the Holders, who propose to sell Notes
      pursuant to the Shelf Registration Statement, as selling noteholders and
      who have furnished to the Company the information required by Section 3(n)
      hereof.

            (b) The Company shall give written notice to the Initial Purchasers,
      the Holders of the Notes and any Participating Broker-Dealer from whom the
      Company has received prior written notice that it will be a Participating
      Broker-Dealer in the Registered Exchange Offer (which notice pursuant to
      clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend
      the use of the prospectus until the requisite changes have been made):

                  (i) when the Registration Statement or any amendment thereto
            has been filed with the Commission and when the Registration
            Statement or any post-effective amendment thereto has become
            effective;

                  (ii) of any request by the Commission for amendments or
            supplements to the Registration Statement or the prospectus included
            therein or for additional information;

                  (iii) of the issuance by the Commission of any stop order
            suspending the effectiveness of the Registration Statement or the
            initiation of any proceedings for that purpose or the issuance by
            the Commission of a notification of objection to the use of the form
            on which the Registration Statement has been filed, and of the
            happening of any event that causes the Company to become an
            "ineligible issuer," as defined in Rule 405 under the Securities
            Act;


                                       5

                  (iv) of the receipt by the Company or its legal counsel of any
            notification with respect to the suspension of the qualification of
            the Notes for sale in any jurisdiction or the initiation or
            threatening of any proceeding for such purpose; and

                  (v) of the happening of any event that requires the Company to
            make changes in the Registration Statement or the prospectus in
            order that the Registration Statement or the prospectus do not
            contain an untrue statement of a material fact nor omit to state a
            material fact required to be stated therein or necessary to make the
            statements therein (in the case of the prospectus, in light of the
            circumstances under which they were made) not misleading.

      (c) The Company shall use its reasonable best efforts to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.

      (d) The Company shall furnish to each Holder of Notes included within the
coverage of the Shelf Registration, without charge, at least one copy of the
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).

      (e) The Company shall deliver to each Exchanging Dealer who so requests
and each Initial Purchaser, and to any other Holder who so requests, without
charge, at least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if any Initial Purchaser or any such Holder requests, all exhibits thereto
(including those incorporated by reference).

      (f) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Notes included within the coverage of the Shelf Registration,
without charge, as many copies of the prospectus (including each preliminary
prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the Notes in
connection with the offering and sale of the Notes covered by the prospectus, or
any amendment or supplement thereto, included in the Shelf Registration
Statement.

      (g) The Company shall deliver to each Initial Purchaser, any Exchanging
Dealer, any Participating Broker-Dealer and such other persons required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus included in the Exchange Offer Registration
Statement and any amendment or supplement thereto as such persons may reasonably
request. The Company consents, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by any Initial
Purchaser, if necessary, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offer in
connection with the offering and sale of the Exchange Notes covered by the
prospectus, or any amendment or supplement thereto, included in such Exchange
Offer Registration Statement.

      (h) Prior to any public offering of the Notes, pursuant to any
Registration Statement, the Company shall register or qualify or cooperate with
the Holders of the Notes included therein and their respective counsel in
connection with the registration or qualification of the Notes for offer and
sale under the securities or "blue sky" laws of such states of the United States
as any Holder of the Notes reasonably requests in writing and do any and all
other acts or things as may be reasonably requested to enable the offer and sale
in such jurisdictions of the Notes covered by such Registration Statement;
provided, however, that the Company shall not be required to (i) qualify
generally to do business or as a dealer in securities in any jurisdiction where
it is not then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is not
then so subject.


                                       6

      (i) The Company shall cooperate with the Holders of the Notes to
facilitate the timely preparation and delivery of certificates representing the
Notes to be sold pursuant to any Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the Holders
may request a reasonable period of time prior to sales of the Notes pursuant to
such Registration Statement.

      (j) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Company is
required to maintain an effective Registration Statement, the Company shall
promptly prepare and file a post-effective amendment to the Registration
Statement or a supplement to the related prospectus and any other required
document so that, as thereafter delivered to Holders of the Notes or purchasers
of Notes, the prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Initial Purchasers, the
Holders of the Notes and any known Participating Broker-Dealer in accordance
with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then
the Initial Purchasers, the Holders of the Notes and any such Participating
Broker-Dealers shall suspend use of such prospectus, and the period of
effectiveness of the Shelf Registration Statement provided for in Section 2(b)
above and the Exchange Offer Registration Statement provided for in Section 1
above shall each be extended by the number of days from and including the date
of the giving of such notice to and including the date when the Initial
Purchasers, the Holders of the Notes and any known Participating Broker-Dealer
shall have received such amended or supplemented prospectus pursuant to this
Section 3(j). During the period during which the Company is required to maintain
an effective Shelf Registration Statement pursuant to this Agreement, the
Company will prior to the three-year expiration of such Shelf Registration
Statement file, and use its reasonable best efforts to cause to be declared
effective (unless it becomes effective automatically upon filing) within a
period that avoids any interruption in the ability of Holders of Notes covered
by the expiring Shelf Registration Statement to make registered dispositions a
new registration statement relating to the Notes, which shall be deemed the
"Shelf Registration Statement" for purposes of this Agreement.

      (k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Initial Notes, the
Exchange Notes or the Private Exchange Notes, as the case may be, and provide
the applicable trustee with printed certificates for the Initial Notes, the
Exchange Notes or the Private Exchange Notes, as the case may be, in a form
eligible for deposit with The Depository Trust Company.

      (l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registered
Exchange Offer or the Shelf Registration and will make generally available to
its security holders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first fiscal quarter commencing after the effective date
of the Registration Statement, which statement shall cover such 12-month period.

      (m) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, (the "TRUST INDENTURE ACT") in a timely
manner and containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

      (n) The Company may require each Holder of the Notes to be sold pursuant
to the Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of the Notes as the Company may from
time to time reasonably require for inclusion in the Shelf Registration
Statement, and the Company may exclude from such registration the Notes of any
Holder that unreasonably fails to furnish such information within a reasonable
time after receiving such request.


                                       7

      (o) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
action, if any, as any Holder of the Notes shall reasonably request in order to
facilitate the disposition of the Notes pursuant to any Shelf Registration.

      (p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Notes, any underwriter
participating in any disposition pursuant to the Shelf Registration Statement
and any attorney, accountant or other agent retained by the Holders of the Notes
or any such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the Company's
officers, directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders of the Notes or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as shall be reasonably necessary to enable
such persons, to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act; provided, however, that the foregoing
inspection and information gathering shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in Section 4
hereof; and provided further, however, that any information that is designated
in writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by each such person,
unless (A) the disclosure of such information is necessary to avoid or correct a
material misstatement or material omission in such Registration Statement or
prospectus, (B) such disclosure is made in connection with a court proceeding,
to any governmental or regulatory authority having jurisdiction over each such
person or their respective affiliates, or is reasonably necessary in order to
establish a "due diligence" defense pursuant to Section 11 of the Securities Act
or (C) such information becomes available to the public generally or through a
third party without an accompanying obligation of confidentiality.

      (q) In the case of any Shelf Registration, the Company, if requested by
any Holder of Notes covered thereby, shall cause (i) its counsel to deliver an
opinion and updates thereof relating to the Notes addressed to such Holders and
the Managing Underwriters (as defined below), if any, thereof and dated, in the
case of the initial opinion, the effective date of such Shelf Registration
Statement substantially in the form of the opinion delivered by such counsel on
the Closing Date pursuant to Section 6(c) of the Purchase Agreement with such
changes as are customary in connection with the preparation of a Shelf
Registration Statement; provided, however, that such opinion shall state that
(A) as of the date of the opinion and as of the effective date of the Shelf
Registration Statement or most recent post-effective amendment thereto or the
most recent prospectus supplement thereto that is deemed to establish a new
effective date with respect thereto, as the case may be, such Shelf Registration
Statement and the prospectus and any prospectus supplement included therein, as
then amended or supplemented, and any documents incorporated by reference
therein, do not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any such incorporated
documents, in the light of the circumstances existing at the time that such
documents were filed with the Commission under the Exchange Act) and (B) as of
an applicable time on the date of pricing identified by such Holders or the
Managing Underwriters, if any, that the prospectus (as supplemented by the most
recent prospectus supplement thereto), taken together with (1) the most recent
prospectus or prospectus supplement, (2) any Issuer FWPs issued in compliance
with Section 3(w) and (3) the pricing information with respect to the applicable
Notes, do not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein in the light of the circumstances in which they are made not misleading,
(ii) its officers to execute and deliver all customary documents and
certificates and updates thereof reasonably requested by any underwriters of the
applicable Notes and (iii) its independent public accountants and the
independent public accountants with respect to any other entity for which
financial information is provided in the Shelf Registration Statement to provide
to the selling Holders of the applicable Notes and any underwriter therefor a
comfort letter in customary form and covering matters of the type customarily
covered in comfort letters in connection with primary underwritten offerings,
subject to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.


                                       8

      (r) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Company shall
cause (i) its counsel to deliver to such Initial Purchaser or such Participating
Broker-Dealer a signed opinion substantially in the form set forth in Section
6(c) of the Purchase Agreement with such changes as are customary in connection
with the preparation of a Registration Statement and (ii) its independent public
accountants and the independent public accountants with respect to any other
entity for which financial information is provided in the Registration Statement
to deliver to such Initial Purchaser or such Participating Broker-Dealer a
comfort letter, in customary form, meeting the requirements as to the substance
thereof as set forth in Section 6(a) of the Purchase Agreement, with appropriate
date changes.

      (s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Notes by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange Notes
or the Private Exchange Notes, as the case may be, the Company shall mark, or
caused to be marked, on the Initial Notes so exchanged that such Initial Notes
are being canceled in exchange for the Exchange Notes or the Private Exchange
Notes, as the case may be; in no event shall the Initial Notes be marked as paid
or otherwise satisfied.

      (t) The Company will use its reasonable best efforts to (a) if the Initial
Notes have been rated prior to the initial sale of such Initial Notes, confirm
such ratings will apply to the Notes covered by a Registration Statement, or (b)
if the Initial Notes were not previously rated, cause the Notes covered by a
Registration Statement to be rated with the appropriate rating agencies, if so
requested by Holders of a majority in aggregate principal amount of Notes
covered by such Registration Statement, or by the Managing Underwriters (as
defined below), if any.

      (u) In the event that any broker-dealer registered under the Exchange Act
shall underwrite any Notes or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution" (within the meaning
of the Conduct Rules (the "RULES") of the National Association of Securities
Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Notes or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company will assist such broker-dealer in complying
with the requirements of such Rules, including, without limitation, by (i) if
such Rules, including Rule 2720, shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in the
preparation of the Registration Statement relating to such Notes, to exercise
usual standards of due diligence in respect thereto and, if any portion of the
offering contemplated by such Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the yield of such
Notes, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules.

      (v) The Company shall use its reasonable best efforts to take all other
steps necessary to effect the registration of the Notes covered by a
Registration Statement contemplated hereby.

      (w) The Company shall not, without the prior written consent of the
Initial Purchasers, and each Holder that may be deemed to be an "underwriter" in
connection with any resale of Notes pursuant to a Shelf Registration shall not
without the prior written consent of the Company, make any offer relating to the
Notes that would constitute a "free writing prospectus" as defined Rule 405
under the Securities Act.


                                       9

      4. Registration Expenses. The Company shall bear all fees and expenses
incurred in connection with the performance of its obligations under Sections 1
through 3 hereof (including the reasonable fees and expenses, if any, of
Cravath, Swaine & Moore LLP, counsel for the Initial Purchasers, incurred in
connection with the Registered Exchange Offer), whether or not the Registered
Exchange Offer or a Shelf Registration is filed or becomes effective, and, in
the event of a Shelf Registration, shall bear or reimburse the Holders of the
Notes covered thereby for the reasonable fees and disbursements of one firm of
counsel designated by the Holders of a majority in principal amount of the
Initial Notes covered thereby to act as counsel for the Holders of the Initial
Notes in connection therewith.

      5. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder of the Notes, any Participating Broker-Dealer and each person, if
any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "INDEMNIFIED PARTIES") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Notes) to which each Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus or "issuer free
writing prospectus" as defined in Rule 433 under the Securities Act (an "Issuer
FWP"), relating to a Shelf Registration, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse, as incurred, the Indemnified Parties for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Company shall not be liable in any such case to
the extent that such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement made in or omission or
alleged omission from a Registration Statement or prospectus or in any amendment
or supplement thereto or in any preliminary prospectus or Issuer FWP relating to
a Shelf Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein and (ii) with respect to any untrue
statement or alleged untrue statement made in or omission or alleged omission
from any preliminary prospectus relating to a Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder or Participating Broker-Dealer from whom the person
asserting any such losses, claims, damages or liabilities purchased the Notes
concerned, to the extent that a prospectus relating to such Notes was required
to be delivered (including through satisfaction of the conditions in Rule 172
under the Securities Act) by such Holder or Participating Broker-Dealer under
the Securities Act in connection with such purchase and any such loss, claim,
damage or liability of such Holder or Participating Broker-Dealer results from
the fact that there was not conveyed to such person, at or prior to the time of
sale of such Notes to such person, an amended or supplemented prospectus or, if
the Shelf Registration Statement is on Form S-3, an Issuer FWP (to the extent
concurrently filed on Form 8-K), in any such case correcting such untrue
statement or omission or alleged untrue statement or omission, if the Company
had previously provided notice to such Holder or Participating Broker-Dealer
pursuant to Section 3(b)(v) and had furnished copies thereof to such Holder or
Participating Broker-Dealer; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company may otherwise
have to such Indemnified Party. The Company shall also indemnify underwriters,
their officers and directors and each person who controls such underwriters
within the meaning of the Securities Act or the Exchange Act to the same extent
as provided above with respect to the indemnification of the Holders of the
Notes if requested by such Holders.

            (b) Each Holder of the Notes, severally and not jointly, will
      indemnify and hold harmless the Company and each person, if any, who
      controls the Company within the meaning of the Securities Act or the
      Exchange Act from and against any losses, claims, damages or liabilities
      or any actions in respect thereof, to which the Company or any such
      controlling person may become subject under the Securities Act, the
      Exchange Act or otherwise, insofar as such losses, claims, damages,
      liabilities or actions arise out of or are based upon any untrue statement
      or alleged untrue statement of a material fact contained in a Registration
      Statement or prospectus or in any amendment or supplement thereto or in
      any preliminary prospectus or Issuer FWP relating to a Shelf Registration,
      or arise out of or are based upon the omission or alleged omission to
      state therein a material fact necessary to make the statements therein not
      misleading, but in each case only to the extent that the untrue statement
      or omission or alleged untrue statement or omission was made in reliance
      upon and in conformity with written information pertaining to such Holder


                                       10

      and furnished to the Company by or on behalf of such Holder specifically
      for inclusion therein; and, subject to the limitation set forth
      immediately preceding this clause, shall reimburse, as incurred, the
      Company for any legal or other expenses reasonably incurred by the Company
      or any such controlling person in connection with investigating or
      defending any loss, claim, damage, liability or action in respect thereof.
      This indemnity agreement will be in addition to any liability which such
      Holder may otherwise have to the Company or any of its controlling
      persons.

            (c) Promptly after receipt by an indemnified party under this
      Section 5 of notice of the commencement of any action or proceeding
      (including a governmental investigation), such indemnified party will, if
      a claim in respect thereof is to be made against the indemnifying party
      under this Section 5, notify the indemnifying party of the commencement
      thereof; but the failure to notify the indemnifying party shall not
      relieve the indemnifying party from any liability that it may have under
      subsection (a) or (b) above except to the extent that it has been
      materially prejudiced by such failure; and provided further that the
      failure to notify the indemnifying party shall not relieve it from any
      liability that it may have to an indemnified party otherwise than under
      subsection (a) or (b) above. In case any such action is brought against
      any indemnified party, and it notifies the indemnifying party of the
      commencement thereof, the indemnifying party will be entitled to
      participate therein and, to the extent that it may wish, jointly with any
      other indemnifying party similarly notified, to assume the defense
      thereof, with counsel reasonably satisfactory to such indemnified party
      (who shall not, except with the consent of the indemnified party, be
      counsel to the indemnifying party), and after notice from the indemnifying
      party to such indemnified party of its election so to assume the defense
      thereof the indemnifying party will not be liable to such indemnified
      party under this Section 5 for any legal or other expenses, other than
      reasonable costs of investigation, subsequently incurred by such
      indemnified party in connection with the defense thereof. In any such
      proceeding, any indemnified party shall have the right to retain its own
      counsel, but the fees and expenses of such counsel shall be at the expense
      of such indemnified party unless (i) the indemnifying party and the
      indemnified party shall have mutually agreed to the contrary; (ii) the
      indemnifying party has failed within a reasonable time to retain counsel
      reasonably satisfactory to the indemnified party; (iii) the indemnified
      party shall have reasonably concluded that there may be legal defenses
      available to it that are different from or in addition to those available
      to the indemnifying party, or (iv) the named parties in any such
      proceeding (including any impleaded parties) include both the indemnifying
      party and the indemnified party and representation of both parties by the
      same counsel would be inappropriate due to actual or potential differing
      interests between them. It is understood and agreed that the indemnifying
      party shall not, in connection with any proceeding or related proceeding
      in the same jurisdiction, be liable for the fees and expenses of more than
      one separate firm (in addition to any local counsel) for all indemnified
      parties, and that all such fees and expenses shall be reimbursed as they
      are incurred. Any such separate firm for any Initial Purchaser, its
      affiliates, directors and officers and any control persons of such Initial
      Purchaser shall be designated in writing by CSFB and any such separate
      firm for the Company, the Guarantors and any control persons of the
      Company and the Guarantors shall be designated in writing by the Company.
      No indemnifying party shall, without the prior written consent of the
      indemnified party, effect any settlement of any pending or threatened
      action in respect of which any indemnified party is or could have been a
      party and indemnity could have been sought hereunder by such indemnified
      party unless such settlement (i) includes an unconditional release of such
      indemnified party from all liability on any claims that are the subject
      matter of such action, and (ii) does not include a statement as to or an
      admission of fault, culpability or a failure to act by or on behalf of any
      indemnified party.

            (d) If the indemnification provided for in this Section 5 is
      unavailable or insufficient to hold harmless an indemnified party under
      subsections (a) or (b) above, then each indemnifying party shall
      contribute to the amount paid or payable by such indemnified party as a
      result of the losses, claims, damages or liabilities (or actions in
      respect thereof) referred to in subsection (a) or (b) above (i) in such
      proportion as is appropriate to reflect the relative benefits received by
      the indemnifying party or parties on the one hand and the indemnified
      party on the other from the exchange of the Notes, pursuant to the
      Registered Exchange Offer or the sale of the Notes pursuant to the Shelf
      Registration, or (ii) if the allocation provided by the foregoing clause
      (i) is not permitted by applicable law, in such proportion as is
      appropriate to reflect not only the relative benefits referred to in
      clause (i) above but also the relative fault of the indemnifying party or
      parties on the one hand and the indemnified party on the other in
      connection with the statements or omissions that resulted in such losses,
      claims, damages or liabilities (or actions in respect thereof) as well as
      any other relevant equitable considerations. The relative fault of the
      parties shall be determined by reference to, among other things, whether
      the untrue or alleged untrue statement of a


                                       11

      material fact or the omission or alleged omission to state a material fact
      relates to information supplied by the Company on the one hand or such
      Holder or such other indemnified party, as the case may be, on the other,
      and the parties' relative intent, knowledge, access to information and
      opportunity to correct or prevent such statement or omission. The amount
      paid by an indemnified party as a result of the losses, claims, damages or
      liabilities referred to in the first sentence of this subsection (d) shall
      be deemed to include any legal or other expenses reasonably incurred by
      such indemnified party in connection with investigating or defending any
      action or claim which is the subject of this subsection (d).
      Notwithstanding any other provision of this Section 5(d), the Holders of
      the Notes shall not be required to contribute any amount in excess of the
      amount by which the net proceeds received by such Holders from the sale of
      the Notes pursuant to a Registration Statement exceeds the amount of
      damages which such Holders have otherwise been required to pay by reason
      of such untrue or alleged untrue statement or omission or alleged
      omission. No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation. For purposes of this paragraph (d), each person, if
      any, who controls such indemnified party within the meaning of the
      Securities Act or the Exchange Act shall have the same rights to
      contribution as such indemnified party and each person, if any, who
      controls the Company within the meaning of the Securities Act or the
      Exchange Act shall have the same rights to contribution as the Company.

            (e) The agreements contained in this Section 5 shall survive the
      sale of the Notes pursuant to a Registration Statement and shall remain in
      full force and effect, regardless of any termination or cancellation of
      this Agreement or any investigation made by or on behalf of any
      indemnified party.

      6. Additional Interest Under Certain Circumstances. (a) Additional
interest (the "ADDITIONAL INTEREST") with respect to the Initial Notes shall be
assessed as follows if any of the following events occur (each such event in
clauses (i) through (v) below a "REGISTRATION DEFAULT"):

                  (i) the Exchange Offer Registration Statement required by this
            Agreement is not filed with the Commission on or prior to the
            Exchange Offer Filing Deadline;

                  (ii) if obligated to file a Shelf Registration Statement
            pursuant to Section 2(ii)-(iv) above, such Shelf Registration
            Statement is not filed prior to the 30th day (or if the 30th day is
            not a business day, the first business day thereafter) after the
            date on which such obligation to file a Shelf Registration Statement
            arises;

                  (iii) any Registration Statement required by this Agreement is
            not declared effective by the Commission on or prior to the Exchange
            Offer Effectiveness Deadline or the Shelf Effectiveness Deadline, as
            applicable;

                  (iv) the Registered Exchange Offer has not been consummated on
            or prior to the 330th day (or if the 330th day is not a business
            day, the first business day thereafter) after the Issue Date; or

                  (v) If after either the Exchange Offer Registration Statement
            or the Shelf Registration Statement is declared effective (or
            becomes automatically effective upon filing) (A) such Registration
            Statement thereafter ceases to be effective; or (B) such
            Registration Statement or the related prospectus ceases to be usable
            (except as permitted in paragraph (b)) in connection with resales of
            Transfer Restricted Notes during the periods specified herein
            because either (1) any event occurs as a result of which the related
            prospectus forming part of such Registration Statement would include
            any untrue statement of a material fact or omit to state any
            material fact necessary to make the statements therein in the light
            of the circumstances under which they were made not misleading, (2)
            it shall be necessary to amend such Registration Statement or
            supplement the related prospectus, to comply with the Securities Act
            or the Exchange Act or the respective rules thereunder or (3) such
            Registration Statement is a Shelf Registration Statement that has
            expired before a replacement Shelf Registration Statement has become
            effective.

      Additional Interest shall accrue on the Initial Notes at a rate of $0.05
      per week per $1,000 principal amount of Notes for the first 90-day period
      immediately following the occurrence of a Registration Default,


                                       12

      increasing by an additional $0.05 per week per $1,000 principal amount of
      Notes with respect to each subsequent 90-day period until all Registration
      Defaults have been cured up to a maximum additional interest rate of $0.30
      per week per $1,000 principal amount of Notes.

            (b) A Registration Default referred to in Section 6(a)(v)(B) hereof
      shall be deemed not to have occurred and be continuing in relation to a
      Shelf Registration Statement or the related prospectus if (i) such
      Registration Default has occurred solely as a result of (x) the filing of
      a post-effective amendment to such Shelf Registration Statement to
      incorporate annual audited financial information with respect to the
      Company where such post-effective amendment is not yet effective and needs
      to be declared effective to permit Holders to use the related prospectus
      or (y) other material events, with respect to the Company that would need
      to be described in such Shelf Registration Statement or the related
      prospectus and (ii) in the case of clause (y), the Company is proceeding
      promptly and in good faith to amend or supplement such Shelf Registration
      Statement and related prospectus to describe such events; provided,
      however, that in any case if such Registration Default occurs for a
      continuous period in excess of 30 days, Additional Interest shall be
      payable in accordance with the above paragraph from the day such
      Registration Default occurs until such Registration Default is cured.

            (c) Any amounts of Additional Interest due pursuant to clause (i),
      (ii), (iii), (iv) or (v) of Section 6(a) above will be payable in cash on
      the regular interest payment dates with respect to the Initial Notes. The
      amount of Additional Interest will be determined by multiplying the
      applicable Additional Interest rate by the principal amount of the Initial
      Notes, multiplied by a fraction, the numerator of which is the number of
      days such Additional Interest rate was applicable during such period
      (determined on the basis of a 360-day year comprised of twelve 30-day
      months), and the denominator of which is 360.

            (d) "TRANSFER RESTRICTED NOTES" means each Initial Note until (i)
      the date on which such Initial Note has been exchanged by a person other
      than a broker-dealer for an Exchange Note in the Registered Exchange
      Offer, (ii) following the exchange by a broker-dealer in the Registered
      Exchange Offer of an Initial Note for an Exchange Note, the date on which
      such Exchange Note is sold to a purchaser who receives from such
      broker-dealer on or prior to the date of such sale a copy of the
      prospectus contained in the Exchange Offer Registration Statement, (iii)
      the date on which such Initial Note has been effectively registered under
      the Securities Act and disposed of in accordance with the Shelf
      Registration Statement or (iv) the date on which such Initial Note is
      distributed to the public pursuant to Rule 144 under the Securities Act or
      is saleable pursuant to Rule 144(k) under the Securities Act.

      7. Rules 144 and 144A. The Company shall use its reasonable best efforts
to file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of any Holder of Initial Notes,
make publicly available other information so long as necessary to permit sales
of their securities pursuant to Rules 144 and 144A. The Company covenants that
it will take such further action as any Holder of Initial Notes may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Initial Notes without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Initial Notes identified to the Company
by the Initial Purchasers upon request. Upon the request of any Holder of
Initial Notes, the Company shall deliver to such Holder a written statement as
to whether it has complied with such requirements. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities pursuant to the Exchange Act.

      8. Underwritten Registrations. If any of the Transfer Restricted Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering (the "MANAGING UNDERWRITERS") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Notes to be included in such offering.

            No person may participate in any underwritten registration hereunder
      unless such person (i) agrees to sell such person's Transfer Restricted
      Notes on the basis reasonably provided in any underwriting arrangements
      approved by the persons entitled hereunder to approve such arrangements
      and (ii) completes and executes all questionnaires, powers of attorney,
      indemnities, underwriting agreements and other documents reasonably
      required under the terms of such underwriting arrangements.


                                       13

      9. Miscellaneous.

            (a) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Notes affected
by such amendment, modification, supplement, waiver or consents.

            (b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:

                  (1) if to a Holder of the Notes, at the most current address
given by such Holder to the Company;

                  (2)  if to the Initial Purchasers:

                        Credit Suisse First Boston LLC
                        Eleven Madison Avenue
                        New York, NY 10010-3629
                        Fax No.:  (212) 325-4296
                        Attention:  Transactions Advisory Group

                  with a copy to:

                        Cravath, Swaine & Moore LLP
                        Worldwide Plaza
                        825 Eighth Avenue
                        New York, NY 10019
                        Fax No.:  (212) 474-3700
                        Attention:  Kris Heinzelman

                  (3) if to the Company, at its address as follows:

                        Skilled Healthcare Group, Inc.
                        27442 Portola Parkway, Suite 200
                        Foothill Ranch, CA 92618
                        Attention:  General Counsel

                  with a copy to:

                        Latham & Watkins LLP
                        650 Town Center Drive, Suite 200
                        Costa Mesa, CA 92626
                        Attention:  Jonn R. Beeson

      All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

      (c) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.

      (d) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.


                                       14

      (e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

      (f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

      (h) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

      (i) Notes Held by the Company. Whenever the consent or approval of Holders
of a specified percentage of principal amount of Notes is required hereunder,
Notes held by the Company or its affiliates (other than subsequent Holders of
Notes if such subsequent Holders are deemed to be affiliates solely by reason of
their holdings of such Notes) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.


                                       15

      If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Issuer and the Guarantors in
accordance with its terms.

                                      Very truly yours,

                                      SHG ACQUISITION CORP.


                                        By:____________________________
                                           Name:  Robert M. Le Blanc
                                           Title: President and Secretary

                                      EACH OF THE SUBSIDIARY GUARANTORS
                                      LISTED ON SCHEDULE I HERETO


                                        By:____________________________
                                           Name:  Roland G. Rapp
                                           Title: General Counsel, Secretary and
                                                  Chief Administrative Officer

The undersigned hereby acknowledges and agrees that, upon the effectiveness of
the Merger (as defined in the Purchase Agreement) it will succeed by operation
of law to all of the rights and obligations of the Company set forth herein and
that all references herein to the "Company" shall thereupon be deemed to be
references to the undersigned.

                                   by:  SKILLED HEALTHCARE GROUP, INC.



                                        By:_____________________________
                                           Name:  Roland G. Rapp
                                           Title: General Counsel, Secretary and
                                                  Chief Administrative Officer


                                       16

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.


by:  CREDIT SUISSE FIRST BOSTON LLC


     By:_____________________________
        Name:
        Title:


                                       17

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

CREDIT SUISSE FIRST BOSTON LLC
J.P. MORGAN SECURITIES INC.


by:  J.P. MORGAN SECURITIES INC.


     By:_____________________________
        Name:
        Title:

                                       18

                                   SCHEDULE I

                         List of Subsidiary Guarantors

Delaware Corporations
- ---------------------
Hallmark Investment Group, Inc.
Summit Care Corporation
Summit Care Pharmacy, Inc.

Delaware Limited Liability Companies
- ------------------------------------
Alexandria Care Center, LLC
Alta Care Center, LLC
Anaheim Terrace Care Center, LLC
Baldwin Healthcare and Rehabilitation Center, LLC
Bay Crest Care Center, LLC
Briarcliff Nursing and Rehabilitation Center GP, LLC
Brier Oak on Sunset, LLC
Carehouse Healthcare Center, LLC
Carson Senior Assisted Living, LLC
Clairmont Beaumont GP, LLC
Clairmont Longview GP, LLC
Colonial New Braunfels GP, LLC
Colonial Tyler GP, LLC
Comanche Nursing Center GP, LLC
Coronado Nursing Center GP, LLC
Devonshire Care Center, LLC
Elmcrest Care Center, LLC
Eureka Healthcare and Rehabilitation Center, LLC
Flatonia Oak Manor GP, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC
Fountain View Subacute and Nursing Center, LLC
Granada Healthcare and Rehabilitation Center, LLC
Guadalupe Valley Nursing Center GP, LLC
Hallettsville Rehabilitation GP, LLC
Hallmark Rehabilitation GP, LLC
Hancock Park Rehabilitation Center, LLC
Hancock Park Senior Assisted Living, LLC
Hemet Senior Assisted Living, LLC
Highland Healthcare and Rehabilitation Center, LLC
Hospice Care Investments, LLC
Hospice Care of the West, LLC
Hospitality Nursing GP, LLC
Leasehold Resource Group, LLC
Live Oak Nursing Center GP, LLC
Louisburg Healthcare and Rehabilitation Center, LLC
Montebello Care Center, LLC
Monument Rehabilitation GP, LLC
Oak Crest Nursing Center GP, LLC
Oakland Manor GP, LLC
Pacific Healthcare and Rehabilitation Center, LLC
Richmond Healthcare and Rehabilitation Center, LLC
Rio Hondo Subacute and Nursing Center, LLC
Rossville Healthcare and Rehabilitation Center, LLC
Royalwood Care Center, LLC
Seaview Healthcare and Rehabilitation Center, LLC
Sharon Care Center, LLC
Shawnee Gardens Healthcare and Rehabilitation Center, LLC


                                       19

Skilled Healthcare, LLC
Southwest Payroll Services, LLC
Southwood Care Center GP, LLC
Spring Senior Assisted Living, LLC
St. Elizabeth Healthcare and Rehabilitation Center, LLC
St. Luke Healthcare and Rehabilitation Center, LLC
Sycamore Park Care Center, LLC
Texas Cityview Care Center GP, LLC
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
The Clairmont Tyler GP, LLC
The Earlwood, LLC
The Heights of Summerlin, LLC
The Woodlands Healthcare Center GP, LLC
Town and Country Manor GP, LLC
Travelmark Staffing, LLC
Valley Healthcare Center, LLC
Villa Maria Healthcare Center, LLC
Vintage Park at Atchison, LLC
Vintage Park at Baldwin City, LLC
Vintage Park at Gardner, LLC
Vintage Part at Lenexa, LLC
Vintage Park at Louisburg, LLC
Vintage Park at Osawatomie, LLC
Vintage Park at Ottawa, LLC
Vintage Park at Paola, LLC
Vintage Park at Stanley, LLC
Wathena Healthcare and Rehabilitation Center, LLC
West Side Campus of Care GP, LLC
Willow Creek Healthcare Center, LLC
Woodland Care Center, LLC

Delaware Limited Partnerships
- --------------------------------------
Briarcliff Nursing and Rehabilitation Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Comanche Nursing Center, LP
Coronado Nursing Center, LP
Flatonia Oak Manor, LP
Guadalupe Valley Nursing Center, LP
Hallettsville Rehabilitation and Nursing Center, LP
Hallmark Rehabilitation, LP
Hospice of the West, LP
Hospitality Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP
Oakland Manor Nursing Center, LP
SHG Resources, LP
Southwood Care Center, LP
Texas Cityview Care Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
The Clairmont Tyler, LP
The Woodlands Healthcare Center, LP
Town and Country Manor, LP
Travelmark Staffing, LP
West Side Campus of Care, LP

                                       20

                                                                         ANNEX A




      Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. By so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Initial Notes where such Initial Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."

                                                                         ANNEX B

      Each broker-dealer that receives Exchange Notes for its own account in
exchange for Initial Notes, where such Initial Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

      Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Initial Notes where such Initial Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until [ ], 200[ ], all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.

      The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commission or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. By
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

      For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Notes) other than commissions or concessions of any brokers or
dealers and will indemnify the Holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

                                     ANNEX D

            CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.

Name:    ___________________________________________
Address: ___________________________________________
         ___________________________________________




      If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is broker-dealer that will receive Exchange
Notes for its own account in exchange for Initial Notes that were acquired as a
result of market-making activities or other trading activities, it acknowledges
that it will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

EX-5.1

Exhibit 5.1

October 6, 2006

Skilled Healthcare Group, Inc.
27442 Portola Parkway, Suite 200
Foothill Ranch, California 92610

     Re: $200,000,000 Aggregate Principal Amount of 11% Senior Subordinated Notes due 2014

Ladies and Gentlemen:

     We have acted as special counsel to Skilled Healthcare Group, Inc., a Delaware corporation (the “Company”), in connection with the issuance of $200,000,000 in aggregate principal amount of 11% Senior Subordinated Notes due 2014 (the “Exchange Notes”), and the guarantees of the Exchange Notes (the “Exchange Guarantees”) by the guarantors specified on Schedule I hereto (the "Guarantors”), under the Indenture dated as of December 27, 2005 (the “Indenture”), among the Company, the Guarantors and Wells Fargo Bank, National Association, as trustee (the “Trustee”), and pursuant to a registration statement on Form S-4 under the Securities Act of 1933, as amended (the "Act”), filed with the Securities and Exchange Commission (the “Commission”) on October 6, 2006 (the “Registration Statement”). The Exchange Notes will be issued in exchange for the Company’s outstanding 11% Senior Subordinated Notes due 2014 issued by the Company on December 27, 2005 (the “Private Notes”), and the Exchange Guarantees will be issued in exchange for the guarantees of the Private Notes issued by the Guarantors on December 27, 2005 (the “Guarantees”), each on the terms set forth in the Registration Statement (the “Exchange Offer”). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or Prospectus included therein, other than as to the enforceability of the Exchange Notes and the Exchange Guarantees.

     In our capacity as your special counsel in connection with such registration we are familiar with the proceedings taken and proposed to be taken by the Company in connection with the authorization and issuance of the Exchange Notes and the Exchange Guarantees. For purposes of this letter, we have assumed that such proceedings to be taken in the future will be completed. We have also examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon the foregoing and upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters.

     We are opining herein as to the internal laws of the State of New York and the general corporation, limited liability company and limited partnership law of the State of Delaware, and

October 6, 2006
Page 2

we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Delaware, any other laws, or as to any matters of municipal law or the laws of any local agencies within any state.

     Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof:

     (1) The Exchange Notes have been duly authorized by all necessary corporate action of the Company and when the Exchange Notes have been duly executed, issued, authenticated and delivered by or on behalf of the Company in accordance with the terms of the Indenture and authenticated by the Trustee against the due tender and delivery to the Trustee of the Private Notes in an aggregate principal amount equal to the aggregate principal amount of the Exchange Notes, the Exchange Notes will be legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.

     (2) The Exchange Guarantees have been duly authorized by all necessary corporate, limited liability company or limited partnership action, as applicable, of each of the Guarantors, and when the Exchange Guarantees have been duly executed and delivered in accordance with the terms of the Exchange Offer and the Indenture (assuming the due execution, issuance and authentication of the Exchange Notes in accordance with the terms of the Indenture and delivery of the Exchange Notes as contemplated by the Registration Statement), the Exchange Guarantees will be the legally valid and binding obligations of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms.

     Our opinions rendered above are subject to: (a) the effect of bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors; (b) the effect of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor is brought; (c) the invalidity under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; (d) we express no opinion with respect to (i) provisions for liquidated damages, default interest, late charges, monetary penalties, make-whole premiums or other economic remedies to the extent such provisions are deemed to constitute a penalty, (ii) the waiver of rights or defenses contained in Section 6.12 of the Indenture; (iii) provisions requiring the payment of attorneys’ fees, where such payment is contrary to law or public policy; (iv) any provision permitting, upon acceleration of the Exchange Notes, collection of that portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon; (v) consents to, or restrictions upon, judicial relief or, except for provisions by which a party agrees to submit to the jurisdiction of New York courts in respect of any action or proceeding arising out of or relating to the Registration Rights Agreement, the Indenture, the Private Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, jurisdiction or venue; (vi) advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitation, trial by jury or at law, or other procedural rights; (vii) waivers of broadly or vaguely stated rights; (viii) provisions for exclusivity, election or cumulation of rights or remedies; (ix) restrictions upon non-written modifications and waivers; (x) provisions authorizing or validating conclusive or discretionary determinations; (xi) provisions to the effect that a guarantor is liable as a primary obligor, and not as a surety; (xii) proxies, powers and trusts; (xiii) provisions prohibiting, restricting, or requiring consent to assignment or transfer of any right or property; or (ix) the severability, if invalid, of provisions to the foregoing effect. We express no opinion as to federal or state securities laws, antitrust or trade regulation laws, insolvency or fraudulent transfer laws, antifraud laws, or compliance with fiduciary duty requirements (without limiting other laws excluded by customary practice).

     With your consent, we have assumed (a) that the Indenture has been duly authorized, executed and delivered by, and constitutes a legally valid and binding obligation of, the Trustee, the Company and each of the Guarantors, enforceable against them in accordance with its terms, and (b) that the status of the Indenture, the Exchange Notes and the Exchange Guarantees as legally valid and binding obligations of the respective parties thereto is not affected by any (i) breaches of, or defaults under, agreements or instruments, (ii) violations of statutes, rules, regulations or court or governmental orders, or (iii) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations or filings with, governmental authorities.

     This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the federal securities laws. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm contained in the Prospectus under the heading “Legal Matters.” In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,
 

/s/ Latham & Watkins LLP  

October 6, 2006
Page 3

SCHEDULE I

GUARANTORS

Delaware Corporations

Hallmark Investment Group, Inc.
Summit Care Corporation
Summit Care Pharmacy, Inc.

Delaware Limited Liability Companies

Alexandria Care Center, LLC
Alta Care Center, LLC
Anaheim Terrace Care Center, LLC
Baldwin Healthcare and Rehabilitation Center, LLC
Bay Crest Care Center, LLC
Briarcliff Nursing and Rehabilitation Center GP, LLC
Brier Oak on Sunset, LLC
Carehouse Healthcare Center, LLC
Carmel Hills Healthcare and Rehabilitation Center, LLC
Carson Senior Assisted Living, LLC
Clairmont Beaumont GP, LLC
Clairmont Longview GP, LLC
Colonial New Braunfels GP, LLC
Colonial Tyler GP, LLC
Comanche Nursing Center GP, LLC
Coronado Nursing Center GP, LLC
Devonshire Care Center, LLC
East Walnut Property, LLC
Elmcrest Care Center, LLC
Eureka Healthcare and Rehabilitation Center, LLC
Flatonia Oak Manor GP, LLC
Fountain Care Center, LLC
Fountain Senior Assisted Living, LLC
Fountain View Subacute and Nursing Center, LLC
Glen Hendren Property, LLC
Granada Healthcare and Rehabilitation Center, LLC
Guadalupe Valley Nursing Center GP, LLC
Hallettsville Rehabilitation GP, LLC
Hallmark Rehabilitation GP, LLC
Hancock Park Rehabilitation Center, LLC
Hancock Park Senior Assisted Living, LLC
Hemet Senior Assisted Living, LLC
Highland Healthcare and Rehabilitation Center, LLC

October 6, 2006
Page 4

Holmesdale Healthcare and Rehabilitation Center, LLC
Holmesdale Property, LLC
Hospice Care Investments, LLC
Hospice Care of the West, LLC
Hospitality Nursing GP, LLC
Leasehold Resource Group, LLC
Liberty Terrace Healthcare and Rehabilitation Center, LLC
Live Oak Nursing Center GP, LLC
Louisburg Healthcare and Rehabilitation Center, LLC
Montebello Care Center, LLC
Monument Rehabilitation GP, LLC
Oak Crest Nursing Center GP, LLC
Oakland Manor GP, LLC
Pacific Healthcare and Rehabilitation Center, LLC
Preferred Design, LLC
Richmond Healthcare and Rehabilitation Center, LLC
Rio Hondo Subacute and Nursing Center, LLC
Rossville Healthcare and Rehabilitation Center, LLC
Royalwood Care Center, LLC
Seaview Healthcare and Rehabilitation Center, LLC
Sharon Care Center, LLC
Shawnee Gardens Healthcare and Rehabilitation Center, LLC
Skilled Healthcare, LLC
Southwest Payroll Services, LLC
Southwood Care Center GP, LLC
Spring Senior Assisted Living, LLC
St. Elizabeth Healthcare and Rehabilitation Center, LLC
St. Joseph Transitional Rehabilitation Center, LLC
St. Luke Healthcare and Rehabilitation Center, LLC
Sycamore Park Care Center, LLC
Texas Cityview Care Center GP, LLC
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC
The Clairmont Tyler GP, LLC
The Earlwood, LLC
The Heights of Summerlin, LLC
The Woodlands Healthcare Center GP, LLC
Town and Country Manor GP, LLC
Travelmark Staffing, LLC
Valley Healthcare Center, LLC
Villa Maria Healthcare Center, LLC
Vintage Park at Atchison, LLC
Vintage Park at Baldwin City, LLC
Vintage Park at Gardner, LLC
Vintage Park at Lenexa, LLC
Vintage Park at Louisburg, LLC

October 6, 2006
Page 5

Vintage Park at Osawatomie, LLC
Vintage Park at Ottawa, LLC
Vintage Park at Paola, LLC
Vintage Park at Stanley, LLC
Wathena Healthcare and Rehabilitation Center, LLC
West Side Campus of Care GP, LLC
Willow Creek Healthcare Center, LLC
Woodland Care Center, LLC

Delaware Limited Partnerships

Briarcliff Nursing and Rehabilitation Center, LP
Clairmont Beaumont, LP
Clairmont Longview, LP
Colonial New Braunfels Care Center, LP
Colonial Tyler Care Center, LP
Comanche Nursing Center, LP
Coronado Nursing Center, LP
Flatonia Oak Manor, LP
Guadalupe Valley Nursing Center, LP
Hallettsville Rehabilitation and Nursing Center, LP
Hallmark Rehabilitation, LP
Hospice of the West, LP
Hospitality Nursing and Rehabilitation Center, LP
Live Oak Nursing Center, LP
Monument Rehabilitation and Nursing Center, LP
Oak Crest Nursing Center, LP
Oakland Manor Nursing Center, LP
SHG Resources, LP
Southwood Care Center, LP
Texas Cityview Care Center, LP
Texas Heritage Oaks Nursing and Rehabilitation Center, LP
The Clairmont Tyler, LP
The Woodlands Healthcare Center, LP
Town and Country Manor, LP
Travelmark Staffing, LP
West Side Campus of Care, LP

EX-10.1

                                                                    Exhibit 10.1

                              RESTRICTED STOCK PLAN

                                   ARTICLE I.
                                    PURPOSE.

          The purpose of the SHG Holding Solutions, Inc. Restricted Stock Plan
(the "Plan") is to aid SHG Holding Solutions, Inc. (the "Company") and its
subsidiaries in attracting and retaining key employees of outstanding ability
and in motivating such employees to exert their best efforts on behalf of the
Company and its subsidiaries. In addition, the Company expects that the Plan
will induce any such employees who receive an Award hereunder to contribute
fully to the further growth and development of the business of the Company and
its subsidiaries.

                                  ARTICLE II.
                                  DEFINITIONS

     2.1 "Affiliate" means, with respect to any Person, (a) any director or
executive officer of such Person, (b) any spouse, parent, sibling, descendant or
trust for the exclusive benefit of such Person or his or her spouse, parent,
sibling or descendant (or the spouse, parent, sibling or descendant of any
director or executive officer of such Person), and (c) any other Person that,
directly or indirectly, controls or is controlled by or is under common control
with such Person. For the purpose of this definition, (i) "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, status as a general partner, or by contract or otherwise and (ii)
Onex Corporation shall be deemed to control any Person controlled by Gerald W.
Schwartz so long as Mr. Schwartz controls Onex Corporation.

     2.2 "Award" means an award of Restricted Stock under this Plan which may be
outright or at a purchase price per share determined by the Committee.

     2.3 "Board" shall mean the Board of Directors of the Company.

     2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

     2.5 "Committee" shall mean the Committee described in Article VII to
administer the Plan.

     2.6 "Common Stock" shall mean common stock of the Company, $0.01 par value
per share.

     2.7 "Date of Grant" shall mean the date on which any Restricted Stock is
awarded hereunder, provided, that the Committee may grant Awards to Participants
to be effective and deemed to be granted on the occurrence of certain specified
contingencies.



     2.8 "Merger" shall mean the merger of SHG Acquisition Corp., a Delaware
corporation, into Skilled Healthcare Group, Inc., a Delaware corporation,
pursuant to the Agreement and Plan of Merger, dated as of October 22, 2005,
among the Company, SHG Healthcare Group, Inc., SHG Acquisition Corp., Heritage
Partners Management Company, LLP, a Delaware limited liability partnership,
Heritage Fund II, L.P., a Delaware limited partnership and Heritage Investors
II, L.L.C., a Delaware limited liability company.

     2.9 "Participant" shall mean any employee of the Company to whom an Award
is made in accordance with the terms hereof.

     2.10 "Qualified Trust" shall mean, with respect to a Participant, a trust
for the exclusive benefit of that Participant and/or members of that
Participant's immediate family of which that Participant is the sole trustee.
The Restricted Stock that has been transferred to a Qualified Trust shall be
deemed to be held by the transferor Participant for purposes of this Plan,
including the vesting and forfeiture provisions hereof.

     2.11 "Restricted Stock" shall mean Common Stock awarded hereunder that is
subject to the restrictions set forth hereunder, for so long as such Common
Stock remains subject to any such restriction.

     2.12 "Restricted Stock Agreement" shall have the meaning set forth in
Section 5.7.

     2.13 "Sale of the Company" means any transaction pursuant to which
Person(s) other than the Company's existing stockholders as of immediately after
the Merger and their respective Affiliates acquire (a) capital stock of the
Company possessing the voting power under normal circumstances to elect a
majority of the Board (whether by merger, consolidation, recapitalization,
reorganization or sale or transfer of the Company's equity interests or
otherwise) or (b) all or substantially all of the assets of the Company and its
subsidiaries (determined on a consolidated basis).

                                  ARTICLE III.
                           SHARES SUBJECT TO THE PLAN

     3.1 The aggregate number of shares of Common Stock that may be issued or
transferred pursuant to the Plan is the number equal to twelve and one-half
percent (12.5%) of the number of shares of Common Stock outstanding immediately
following the Merger, excluding any shares granted under this Plan. Such shares
may be authorized and unissued, or treasury shares, or any combination thereof.
Any shares subject to an Award which for any reason are forfeited, cancelled or
terminated, may be subject to a new Award.

                                   ARTICLE IV.
                          ELIGIBILITY AND PARTICIPATION

     4.1 Any officer or other key employee of the Company or one of its
subsidiaries, shall be eligible to receive an Award. The individuals set forth
on Schedule A hereto shall be participants as of the effective date of this plan
(the "Initial Participants").


                                       2



                                   ARTICLE V.
                         TERMS AND CONDITIONS OF AWARDS

     5.1 Award of Restricted Stock. The Committee shall from time to time, in
its discretion, award shares of Restricted Stock to any key employee, upon such
terms and conditions, consistent with the provisions of this Plan, as it may
determine.

     5.2 Issuance of Restricted Shares. Upon the Award of Restricted Stock, the
Committee shall promptly notify each Participant of such Award, including the
Date of Grant thereof, and a Restricted Stock Agreement shall promptly be
executed and delivered by and on behalf of the Company. Such Restricted Stock
Agreement may provide that the Restricted Stock is subject to such restrictions
as the Committee may provide, including, but not limited to, restrictions
concerning voting rights and transferability. The Committee also may require
that an appropriate legend be placed on stock certificates with respect to the
restrictions imposed thereon. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Participant as soon as
reasonably practicable after the Award is granted, provided that the Participant
has executed the Restricted Stock Agreement. Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of while any such restriction is in effect.

     5.3 Vesting. The Committee shall have the discretion to determine the
period and the conditions, if any, upon which an Award shall vest and become
nonforfeitable. Notwithstanding the foregoing, each Initial Participant shall
vest in twenty-five percent (25%) of his shares on the Date of Grant and in an
additional twenty-five percent (25%) on each of the first three anniversaries of
the date on which the Merger is consummated. Except as otherwise provided herein
or in a Restricted Stock Agreement, any nonvested Restricted Stock Awarded to a
Participant shall be immediately forfeited if such Participant ceases to be an
employee of or consultant to the Company or one of its subsidiaries for any
reason, and such Participant shall have no further rights to or with respect to
such shares.

     5.4 Rights as a Shareholder. Notwithstanding anything herein to the
contrary, unless otherwise provided in a Restricted Stock Agreement, a
Participant shall have, subject to the restrictions set forth in this Article V,
all of the rights of a shareholder with respect to such Restricted Stock,
including the right to receive all dividends paid thereon.

     5.5 Lapse of Restrictions. Unless otherwise provided in a Restricted Stock
Agreement, in the event of a Sale of the Company, all restrictions on the
Participant's Restricted Stock shall lapse immediately prior to (but subject to)
consummation of such transaction and such Restricted Stock shall no longer be
subject to forfeiture.

     5.6 Lapse at Discretion of the Committee. The Committee may at any time, in
its sole discretion, accelerate the time at which any or all restrictions will
lapse or remove any or all of such restrictions with respect to Restricted Stock
awarded hereunder.

     5.7 Restricted Stock Agreements. Each Award of Restricted Stock under this
Plan shall be evidenced by a Restricted Stock Agreement which shall contain such
terms and conditions as the Committee shall determine, consistent with this
Plan.


                                       3



                                   ARTICLE VI.
                         DILUTION AND OTHER ADJUSTMENTS

     6.1 Merger, Consolidation, etc. In the event of any change in the
outstanding Common Stock as a result of a dissolution or liquidation of the
Company, sale of all or substantially all of the assets of the Company and its
subsidiaries, merger or consolidation of the Company with or into any other
corporation, statutory share exchange involving capital stock of the Company,
reorganization, recapitalization, reclassification, stock dividend,
extraordinary dividend, stock split, reverse stock split, stock combination,
rights offering, spin-off or other relevant change that does not in any such
case constitute a Sale of the Company, the Committee may adjust the aggregate
number of shares of Common Stock available for Awards under the Plan, and any or
all other matters deemed appropriate by the Committee, including, without
limitation, (i) the continuation of this Plan and/or the assumption of the
Awards granted hereunder by a successor corporation (or a parent or subsidiary
thereof) or (ii) the substitution for such Awards of new awards covering the
stock of a successor corporation (or a parent or subsidiary thereof), with
appropriate adjustments as to the number and kind of shares and exercise prices.
In the event of any continuation, assumption or substitution contemplated by the
foregoing clauses, this Plan and/or such Awards shall continue in the manner and
under the terms so provided.

     6.2 Change in Capitalization. If, by reason of a change in capitalization
described in this Article VI, a Participant shall be entitled to new, additional
or different shares of stock or securities of the Company or any other
corporation in respect of his or her Award, in the event that this Plan
continues, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the shares of Common Stock subject to the Award, as the case may
be, prior to such change in capitalization.

                                  ARTICLE VII.
                               PLAN ADMINISTRATION

     7.1 Committee Membership. The Plan shall be administered by a committee of
directors appointed by the Board to administer this Plan, which shall consist of
at least three members, each of whom is not a Participant herein.

     7.2 Authority and Discretion. The Committee shall administer this Plan and,
subject to the limitations set forth herein, shall have absolute discretion and
authority to: (i) grant awards hereunder; (ii) determine when and to which key
employees and directors such awards will be granted; (iii) determine the form,
amount and other terms and conditions of each such Award; (iv) interpret this
Plan and any Award or agreement made thereunder; (v) establish, amend, waive and
rescind any rules and regulations relating to the administration of this Plan;
(vi) determine the terms and provisions of any Restricted Stock Agreement
entered into hereunder; and (vii) make all other determinations necessary or
advisable for the administration of this Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in this Plan or in
any agreement in the manner and to the extent it shall deem desirable. All
determinations of the Committee in the administration of this Plan, as described
herein, shall be final, binding and conclusive, including, without limitation,
as to any adjustments pursuant to


                                       4



Article VI. A majority of the members of the Committee shall constitute a quorum
for any meeting of the Committee and a majority of a quorum may authorize any
action.

                                  ARTICLE VIII.
                      AMENDMENT AND TERMINATION OF THE PLAN

     8.1 Amendment, Modification and Termination of this Plan. Except as
provided in this Article VIII, (i) the Committee may at any time amend, modify,
terminate or suspend this Plan and (ii) the Committee may at any time alter or
amend any or all agreements evidencing Awards hereunder to the extent permitted
by law. This Plan shall terminate upon a Sale of the Company. No termination,
suspension, modification or amendment of this Plan or any agreement evidencing
an Award shall impair or adversely affect any right acquired by any Participant
or such Participant's permitted transferee under an Award granted before the
date of termination, suspension, modification or amendment unless the consent of
such Participant or transferee is obtained.

                                   ARTICLE IX.
                                  MISCELLANEOUS

     9.1 Effective Date. The Plan shall become effective as of the effective
time of the Merger.

     9.2 Rights as an Employee. Nothing in the Plan, the grant or holding of an
Award, or in any Restricted Stock Agreement shall confer to any holder of an
Award any right to continue in the employ of the Company or any of its
subsidiaries or as a member of the Board, or interfere in any way with the right
of the Company or any parent or subsidiary of the Company to terminate a
Participant's employment or directorship at any time.

     9.3 Withholding. It shall be a condition to the performance of the
Company's obligation with respect to any Award that a Participant pay, or make
provision satisfactory to the Company for the payment of, any taxes which the
Company is obligated to collect with respect to the issuance, vesting or
exercise of any Plan Award, including any Federal, state, or local withholding
taxes.

     9.4 Non-Assignability of Plan Awards. Except as otherwise set forth herein,
no Award shall be sold, pledged, assigned or transferred by the recipient,
except by will or by the laws of descent and distribution or pursuant to a
"qualified domestic relations order," as such term is defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended or to
a Qualified Trust. The Company may require as a condition to a transfer to a
Qualified Trust that the Qualified Trust enter into agreements satisfactory to
the Company with respect to the Qualified Trust's compliance with this Plan and
the applicable Restricted Stock Agreement. No Award or interest therein may be
sold, pledged, attached, or otherwise encumbered other than in favor of the
Company, and no Award shall be liable for the debts, contracts or engagements of
the holder of an Award or his or her successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, encumbrance, assignment or
any other means whether such disposition may be voluntary or involuntary or by
operation of law or


                                       5


judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempt to do so shall be null and
void and of no force or effect.

     9.5 Other Restrictions. Each Plan Award shall be subject to the requirement
that, if at any time the Board or the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the shares
issuable or transferable upon exercise thereof upon any securities exchange or
under any state or Federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the lapsing of any restriction with respect to such Award or the issue,
transfer, or purchase of shares thereunder, the restrictions with respect to
such Award shall not lapse, and such issue, transfer or purchase shall not
occur, in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Board. The Company shall not be obligated to sell or issue
any shares of Common Stock in any manner in contravention of the Securities Act
of 1933, as amended, or any state securities law.

     9.6 Governing Law. This Plan and any agreements hereunder shall be
interpreted and enforced under the internal laws of the State of Delaware
without regard to the conflicts of law principles thereof.

     9.7 No Waiver. No modification or waiver of any of the provisions of this
Plan shall be effective unless in writing and signed by the party against whom
it is sought to be enforced.

     9.8 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

     9.9 Binding Nature. This Plan and the agreements evidencing Awards
hereunder shall be binding upon and inure to the benefit of the successors
(including by way of merger), assigns and heirs of the respective parties.


                                       6



                                   SCHEDULE A

Initial Participants

Boyd Hendrickson
Jose Lynch
Roland Rapp
Mark Wortley
John King
Kelly Atkins
Eddie Parades
Paul Sumorow
Carl Seaburn
Kathy Mahon


                                       7

EX-10.2

                                                                    Exhibit 10.2

                           SHG HOLDING SOLUTIONS, INC.

                              RESTRICTED STOCK PLAN

                           RESTRICTED STOCK AGREEMENT

     This Restricted Stock Agreement (the "Agreement") is entered into effective
as of December 27, 2005, between SHG Holding Solutions, Inc., a Delaware
corporation (the "Company"), and _______ (the "Participant").

     1. RESTRICTED STOCK PLAN. This Agreement is entered into pursuant to the
terms of the SHG Holding Solutions, Inc. Restricted Stock Plan, as it may be
amended from time to time (the "Plan"), which is incorporated herein and made a
part hereof for all purposes. To the extent that any provision of this Agreement
conflicts with the express terms of the Plan, the terms of the Plan shall
control and, if necessary, the applicable provisions of this Agreement shall be
deemed amended so as to carry out the purpose and intent of the Plan.

     2. DEFINITIONS. All capitalized terms in this Agreement shall have the
meanings ascribed to them in the Plan unless otherwise defined in this
Agreement.

     3. RESTRICTED STOCK. In order to encourage the Participant's contribution
to the successful performance of the Company, and in consideration of the
covenants and promises of the Participant herein contained, the Company hereby
grants to the Participant as of December 27, 2005 (the "Date of Grant"), a total
of _______ shares of Common Stock, subject to the conditions and restrictions
set forth below and in the Plan (the "Restricted Stock").

     4. ESCROW OF CERTIFICATES. The certificates representing shares of
Restricted Stock shall be registered in the name of the Participant and
deposited, together with a stock power endorsed by the Participant in blank,
with the Secretary of the Company (or his or her designee) until such shares
have vested in the Participant in accordance with Section 6. Each such
certificate shall bear a legend as provided by the Company, conspicuously
referring to the terms, conditions and restrictions described in the Plan and in
this Agreement. The Participant, by executing this Agreement in the space
provided below, hereby acknowledges (a) that, as a material inducement to the
grant of this Award under the Plan, the Secretary of the Company (or his or her
designee) is so appointed as the escrow holder with the authority to hold said
certificates and stock powers in escrow and to take all such actions and to
effectuate all transfers of vested Restricted Stock or releases as are in
accordance with the terms of this Agreement or the Plan and (b) that the
appointment is coupled with an interest, and that it accordingly will be
irrevocable. The escrow holder will not be liable to the Participant (or to any
other party) for any actions or omissions unless the escrow holder is grossly
negligent. The escrow holder may rely upon any letter, notice, or other document
executed by any signature purported to be genuine.

     5. RESTRICTIONS ON TRANSFER BEFORE VESTING. The shares of Restricted Stock
granted hereunder to the Participant are subject to Section 9.4 of the Plan
during the period from the Date of Grant until they have become vested in the
Participant in accordance with the provisions of Section 6.



     6. VESTING OF RESTRICTED STOCK. All restrictions (other than those set
forth in the Investor Stockholder Agreement referred to in Section 11, which
shall continue in effect without regard to whether any Restricted Stock has
vested) shall lapse and the Restricted Stock shall vest as follows:

     (a) The Participant shall become vested as to:

          (i) 25% of the total number of shares of Restricted Stock on December
27, 2005;

          (ii) an additional 25% of the total number of shares of Restricted
Stock on December 27, 2006;

          (iii) an additional 25% of the total number of shares of Restricted
Stock on December 27, 2007; and

          (iv) the remaining 25% of the total number of shares of Restricted
Stock on December 27, 2008;

provided, however, that the Participant shall not vest pursuant to this Section
6(a) in shares of Restricted Stock if the Participant has not been continuously
employed by the Company or one of its subsidiaries from the date of this
Agreement through such vesting date and such shares shall be forfeited.

     (b) All shares of Restricted Stock shall, unless previously forfeited,
become vested upon the occurrence of a Sale of the Company.

     7. TERMINATION OF EMPLOYMENT; FORFEITURE OF UNVESTED RESTRICTED STOCK. If
the Participant ceases to be an employee of the Company or one of its
subsidiaries for any reason, then the shares of Restricted Stock that have not
previously vested in accordance with Section 6 above as of the date of such
termination, shall be forfeited by the Participant to the Company.

     8. LIMITATION OF RIGHTS. Nothing in this Agreement or the Plan shall be
construed to:

     (a) give the Participant any right to be awarded any further restricted
stock other than in the sole discretion of the Committee;

     (b) give the Participant or any other person any interest in any fund or in
any specified asset or assets of the Company or any Subsidiary; or

     (c) confer upon the Participant the right to continue in the employment or
service of the Company or any of its subsidiaries, or affect the right of the
Company or any of its subsidiaries to terminate the employment or service of the
Participant at any time or for any reason.

     9. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of and be enforceable by the Participant, the Company and their
respective permitted successors and assigns (including personal representatives,
heirs and legatees), except that the Participant may


                                       2



not assign any rights or obligations under this Agreement except to the extent
and in the manner expressly permitted herein.

     10. SECURITIES ACT. The Company will not be required to deliver any shares
of Common Stock pursuant to this Agreement if, in the opinion of counsel for the
Company, such issuance would violate the Securities Act of 1933 or any other
applicable federal or state securities laws or regulations. The Company may
require that the Participant, prior to the issuance of any such shares pursuant
to this Agreement deliver to the Company a written statement ("Investment
Letter"), in form and content acceptable to the Company, in its sole discretion,
stating (i) that the Participant is purchasing the shares for investment and not
with a view to the sale or distribution thereof, and (ii) that the Participant
will not sell any shares of the Company that the Participant may then own or
thereafter acquire except pursuant to a registered offering or a valid exemption
from registration. Any stock certificates issued pursuant to this Agreement
shall bear a restrictive legend as follows:

          THIS STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
          AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR
          OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM
          REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
          ACCORDANCE WITH ALL OTHER APPLICABLE SECURITIES LAWS.

     11. INVESTOR STOCKHOLDER AGREEMENT. The Participant is a party to the
Investor Stockholder Agreement dated as of December 27, 2005 among the Company
and the stockholders named therein; the shares of Common Stock transferred to
the Participant hereunder are subject to that agreement and shall remain subject
to that agreement following vesting.

     12. FEDERAL AND STATE TAXES. Any amount of Common Stock that is payable or
transferable to the Participant hereunder may be subject to the payment of or
reduced by any amount or amounts which the Company is required to withhold under
the then applicable provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), or its successors, or any other federal, state or local tax
withholding requirement. The Participant may, in his or her discretion, make the
election permitted by Section 83(b) of the Code with respect to the grant of
Restricted Stock pursuant to this Agreement. When the Company is required to
withhold any amount or amounts under the applicable provisions of the Code, the
Participant shall either pay to the Company, in cash or by certified or
cashier's check, an amount equal to the taxes required to be withheld, or the
Participant shall authorize (in writing) the Company to withhold from the
payments to the Participant in an amount equal to the amount of federal, state
or local taxes required to be withheld.

     13. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware.


                                       3



     This Agreement is executed and delivered, in duplicate, pursuant to the
Plan, the provisions of which are incorporated herein by reference.

                                        SHG HOLDING SOLUTIONS, INC.


                                        By:
                                            ------------------------------------
                                        Name and Title:
                                                        ------------------------

Print Name:
            -------------------


                                       4

EX-10.3

                                                             Exhibit 10.3

                           SECOND AMENDED AND RESTATED
                           FIRST LIEN CREDIT AGREEMENT

                          DATED AS OF DECEMBER 27, 2005

                                      AMONG

                         SKILLED HEALTHCARE GROUP, INC.,

                          SHG HOLDING SOLUTIONS, INC.,

                           THE LENDERS LISTED HEREIN,
                                   AS LENDERS,

                                 CREDIT SUISSE,
                AS ADMINISTRATIVE AGENT AND AS COLLATERAL AGENT,

                                       AND

                                 CREDIT SUISSE,
                    AS SOLE LEAD ARRANGER AND SOLE BOOKRUNNER



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                      
SECTION 1. DEFINITIONS...................................................      2
   1.1     Certain Defined Terms.........................................      2
   1.2     Accounting Terms; Utilization of GAAP for Purposes of
           Calculations Under Agreement..................................     36
   1.3     Other Definitional Provisions and Rules of Construction.......     36

SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS....................     37
   2.1     Commitments; Making of Loans; the Register;
           Optional Notes................................................     37
   2.2     Interest on the Loans.........................................     45
   2.3     Fees..........................................................     49
   2.4     Repayments, Prepayments and Reductions of Revolving Loan
           Commitment Amount; General Provisions Regarding
           Payments; Application of Proceeds of Collateral and
           Payments Under Subsidiary Guaranty............................     50
   2.5     Use of Proceeds...............................................     60
   2.6     Special Provisions Governing Eurodollar Rate Loans............     60
   2.7     Increased Costs; Taxes; Capital Adequacy......................     62
   2.8     Statement of Lenders; Obligation of Lenders and Issuing
           Lenders to Mitigate...........................................     67
   2.9     Replacement of a Lender.......................................     68

SECTION 3. LETTERS OF CREDIT.............................................     69
   3.1     Issuance of Letters of Credit and Lenders' Purchase of
           Participations Therein........................................     69
   3.2     Letter of Credit Fees.........................................     72
   3.3     Drawings and Reimbursement of Amounts Paid Under Letters
           of Credit.....................................................     73
   3.4     Obligations Absolute..........................................     75
   3.5     Nature of Issuing Lenders' Duties.............................     76

SECTION 4. CONDITIONS TO EFFECTIVENESS AND REVOLVING LOANS
           AND LETTERS OF CREDIT.........................................     77
   4.1     Conditions to Effectiveness...................................     77
   4.2     Conditions to All Revolving Loans.............................     84
   4.3     Conditions to Letters of Credit...............................     85



                                       -i-



                                TABLE OF CONTENTS
                                   (continued)



                                                                            PAGE
                                                                            ----
                                                                      
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES......................     85
   5.1     Organization, Powers, Qualification, Good Standing,
           Business and Subsidiaries.....................................     85
   5.2     Authorization of Borrowing, etc...............................     86
   5.3     Financial Condition...........................................     88
   5.4     No Material Adverse Effect; No Restricted Junior Payments.....     88
   5.5     Title to Properties; Liens; Real Property; Intellectual
           Property......................................................     88
   5.6     Litigation; Adverse Facts.....................................     89
   5.7     Payment of Taxes..............................................     90
   5.8     Performance of Agreements.....................................     90
   5.9     Governmental Regulation.......................................     90
   5.10    Securities Activities.........................................     90
   5.11    Employee Benefit Plans........................................     91
   5.12    Certain Fees..................................................     91
   5.13    Environmental Protection......................................     91
   5.14    Employee Matters..............................................     92
   5.15    Solvency......................................................     92
   5.16    Matters Relating to Collateral................................     92
   5.17    Disclosure....................................................     94
   5.18    Subordinated Indebtedness.....................................     94
   5.19    Reporting to IRS..............................................     94
   5.20    Healthcare Matters............................................     94
   5.21    Reimbursement; Nongovernmental Payors.........................     95
   5.22    Foreign Assets Control Regulations, etc.......................     95
   5.23    Related Agreements............................................     95

SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS...............................     96
   6.1     Financial Statements and Other Reports........................     96
   6.2     Existence, Healthcare Authorizations, etc.....................    102
   6.3     Payment of Taxes and Claims; Tax..............................    102
   6.4     Maintenance of Properties; Insurance; Application of Net
           Insurance/ Condemnation Proceeds..............................    102



                                      -ii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                            PAGE
                                                                            ----
                                                                      
   6.5     Inspection Rights; Lender Meeting.............................    104
   6.6     Compliance with Laws, etc.....................................    104
   6.7     Environmental Matters.........................................    104
   6.8     Execution of Subsidiary Guaranty and Personal
           Property Collateral Documents After the Effective Date........    106
   6.9     Matters Relating to Additional Real Property Collateral.......    107
   6.10    Interest Rate Protection......................................    108
   6.11    Deposit Accounts, Securities Accounts and Cash
           Management Systems; Government Reimbursement
           Deposit Accounts..............................................    108
   6.12    Ratings.......................................................    109

SECTION 7. NEGATIVE COVENANTS............................................    110
   7.1     Indebtedness..................................................    110
   7.2     Liens and Related Matters.....................................    112
   7.3     Investments; Acquisitions.....................................    113
   7.4     Contingent Obligations........................................    116
   7.5     Restricted Junior Payments....................................    117
   7.6     Financial Covenants...........................................    117
   7.7     Restriction on Fundamental Changes; Asset Sales...............    119
   7.8     Consolidated Capital Expenditures.............................    121
   7.9     Transactions with Shareholders and Affiliates.................    121
   7.10    Sales and Lease-Backs.........................................    122
   7.11    Conduct of Business...........................................    122
   7.12    Amendments of Documents Relating to Subordinated
           Indebtedness; Amendments or Waivers of Related
           Agreements; Designation of Designated Senior
           Indebtedness..................................................    122
   7.13    Fiscal Year...................................................    123
   7.14    Government Reimbursement Deposit Accounts.....................    123

SECTION 8. EVENTS OF DEFAULT.............................................    123
   8.1     Failure to Make Payments When Due.............................    123
   8.2     Default in Other Agreements...................................    124
   8.3     Breach of Certain Covenants...................................    124



                                      -iii-



                                TABLE OF CONTENTS
                                   (continued)



                                                                            PAGE
                                                                            ----
                                                                      
   8.4     Breach of Warranty............................................    124
   8.5     Other Defaults Under Loan Documents...........................    124
   8.6     Involuntary Bankruptcy; Appointment of Receiver, etc..........    125
   8.7     Voluntary Bankruptcy; Appointment of Receiver, etc............    125
   8.8     Judgments and Attachments.....................................    125
   8.9     Dissolution...................................................    126
   8.10    Employee Benefit Plans........................................    126
   8.11    Change in Control.............................................    126
   8.12    Invalidity of Loan Documents; Failure of Security;
           Repudiation of Obligations....................................    126
   8.13    Failure to Maintain Healthcare Authorizations.................    126
   8.14    Conduct of Business By Holdings...............................    127
   8.15    Amendment of Certain Documents of Holdings....................    127

SECTION 9. ADMINISTRATIVE AGENT AND COLLATERAL AGENT.....................    128
   9.1     Appointment...................................................    128
   9.2     Powers and Duties; General Immunity...........................    129
   9.3     Independent Investigation by Lenders; No Responsibility
           For Appraisal of Creditworthiness.............................    131
   9.4     Right to Indemnity............................................    131
   9.5     Resignation of Agents; Successor Administrative Agent,
           Collateral Agent and Swing Line Lender........................    132
   9.6     Collateral Documents, Subsidiary Guaranty and Termination
           of Intercreditor Agreement....................................    133
   9.7     Duties of Other Agents........................................    134
   9.8     Administrative Agent May File Proofs of Claim.................    134

SECTION 10. MISCELLANEOUS................................................    135
   10.1    Successors and Assigns; Assignments and Participations
           in Loans and Letters of Credit................................    135
   10.2    Expenses......................................................    140
   10.3    Indemnity.....................................................    140
   10.4    Set-Off.......................................................    142
   10.5    Ratable Sharing...............................................    142



                                      -iv-



                                TABLE OF CONTENTS
                                   (continued)



                                                                            PAGE
                                                                            ----
                                                                      
   10.6    Amendments and Waivers........................................    143
   10.7    Independence of Covenants.....................................    145
   10.8    Notices; Effectiveness of Signatures..........................    145
   10.9    Survival of Representations, Warranties and Agreements........    146
   10.10   Failure or Indulgence Not Waiver; Remedies Cumulative.........    146
   10.11   Marshalling; Payments Set Aside...............................    146
   10.12   Severability..................................................    146
   10.13   Obligations Several; Independent Nature of
           Lenders' Rights; Damage Waiver................................    147
   10.14   Release of Security Interest or Guaranty......................    147
   10.15   Applicable Law................................................    148
   10.16   Construction of Agreement; Nature of Relationship.............    148
   10.17   Consent to Jurisdiction and Service of Process................    148
   10.18   Waiver of Jury Trial..........................................    149
   10.19   Confidentiality...............................................    150
   10.20   Counterparts; Effectiveness...................................    151
   10.21   Amendment and Restatement; Releases...........................    151
   Signature Pages.......................................................    S-1



                                       -v-



                                    EXHIBITS

I     FORM OF NOTICE OF BORROWING

II    FORM OF NOTICE OF CONVERSION/CONTINUATION

III   FORM OF REQUEST FOR ISSUANCE

IV    FORM OF TERM NOTE

V     FORM OF NOTICE OF PREPAYMENT

VI    FORM OF REVOLVING NOTE

VII   FORM OF SWING LINE NOTE

VIII  FORM OF COMPLIANCE CERTIFICATE

IX    FORM OF OPINION OF COMPANY COUNSEL

X     [INTENTIONALLY OMITTED]

XI    FORM OF ASSIGNMENT AGREEMENT

XII   FORM OF FINANCIAL CONDITION CERTIFICATE

XIII  FORM OF SUBSIDIARY GUARANTY

XIV   FORM OF SECURITY AGREEMENT

XV    FORM OF MORTGAGE

XVI   [INTENTIONALLY OMITTED]

XVII  FORM OF HOLDINGS SECURITY AGREEMENT

XVIII FORM OF RESTATEMENT CONSENT


                                      -vi-



                                    SCHEDULES

1.1  EXISTING MORTGAGED PROPERTIES

2.1  LENDERS' REVOLVING LOAN COMMITMENTS

4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT

5.1  JURISDICTIONS OF ORGANIZATION; SUBSIDIARIES OF COMPANY

5.5B REAL PROPERTY

5.5C INTELLECTUAL PROPERTY

5.6  LITIGATION

5.11 CERTAIN EMPLOYEE BENEFIT PLANS

5.13 ENVIRONMENTAL MATTERS

7.1  CERTAIN EXISTING INDEBTEDNESS

7.2  CERTAIN EXISTING LIENS

7.3  CERTAIN EXISTING INVESTMENTS

7.4  CERTAIN EXISTING CONTINGENT OBLIGATIONS


                                      -vii-

                         SKILLED HEALTHCARE GROUP, INC.

             SECOND AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT

          This SECOND AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT is dated
as of December 27, 2005 and entered into by and among SKILLED HEALTHCARE GROUP,
INC. (f/k/a Fountain View, Inc.), a Delaware corporation, SHG HOLDING SOLUTIONS,
INC., a Delaware corporation ("HOLDINGS"), THE FINANCIAL INSTITUTIONS LISTED ON
THE SIGNATURE PAGES HEREOF (each individually referred to herein as a "LENDER"
and collectively as "LENDERS"), and CREDIT SUISSE, Cayman Islands Branch
(formerly known as Credit Suisse First Boston, acting through its Cayman Islands
Branch, "CS"), as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT") and as collateral agent for Lenders (in such capacity,
"COLLATERAL AGENT").

                                    RECITALS

          WHEREAS, Company, Administrative Agent and certain lenders (the
"EXISTING LENDERS") are party to the Existing First Lien Credit Agreement
(capitalized terms used herein without definition are defined in subsection 1.1
of this Agreement);

          WHEREAS, Holdings and its direct wholly-owned Subsidiary, Merger Sub,
have been formed by Onex for the purpose of acquiring all of the Equity
Interests of Company;

          WHEREAS, on or before the Effective Date, Holdings will own all of the
outstanding shares of capital stock of Merger Sub;

          WHEREAS, on or before the Effective Date, Onex and other investors
will purchase all of the outstanding Equity Interests of Holdings;

          WHEREAS, on or before the Effective Date, Company will issue and sell
up to $200,000,000 in aggregate principal amount of Senior Subordinated Notes,
or if the Senior Subordinated Notes are not issued on the Effective Date,
Company will borrow not less than $200,000,000 under the Bridge Facility;

          WHEREAS, on the Effective Date, Merger Sub will be merged with and
into Company pursuant to the Acquisition Agreement and the Certificate of
Merger, with Company being the surviving corporation in such merger;

          WHEREAS, in connection with the Acquisition, Company desires to (i)
continue the Existing First Lien Credit Agreement and the loans and commitments
thereunder, as amended and restated hereby, (ii) increase the Revolving Loan
Commitment Amount; (iii) issue the Senior Subordinated Notes or, if Company does
not issue the Senior Subordinated Notes, borrow money under the Bridge Facility;
(iv) repay in full all Indebtedness outstanding under the Existing Second Lien
Credit Agreement with the proceeds from the issuance of the Senior Subordinated
Notes or the Bridge Facility, as applicable, terminate the Existing Second Lien



Credit Agreement and release all Second Priority Liens and (v) consummate the
Acquisition (the "TRANSACTIONS");

          WHEREAS, Company will continue to secure its Obligations hereunder and
under the other Loan Documents and all of Company's Subsidiaries will continue
to guarantee the Obligations of Company hereunder and under the other Loan
Documents and to continue to secure such guarantees;

          WHEREAS, Holdings has agreed to grant to Administrative Agent, on
behalf of Lenders, a first priority Lien on substantially all of its property,
including a pledge of all of the Equity Interests of the Company; and

          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Existing Requisite
Lenders, Increasing Revolving Lenders, New Revolving Lenders and Administrative
Agent hereby consent to the Transactions and agree that the Existing First Lien
Credit Agreement is hereby amended and restated to read in its entirety as
follows:

SECTION 1. DEFINITIONS

     1.1  CERTAIN DEFINED TERMS.

          The following terms used in this Agreement shall have the following
meanings:

          "ACCOUNT" means all present and future accounts, general intangibles,
chattel paper, documents and instruments, as such terms are defined in the UCC,
of Company or a Subsidiary of Company, including, without limitation, all
obligations for the payment of money arising out of the sale, lease, license or
other disposition of goods or other property or the rendering of services and
all proceeds thereof.

          "ACKNOWLEDGMENT AND CONSENT" means the Acknowledgment and Consent
delivered by Company and its Subsidiaries on the Closing Date, substantially in
the form of Exhibit XVI attached hereto.

          "ACQUISITION" means the transactions contemplated by the Acquisition
Agreement, including the Merger.

          "ACQUISITION AGREEMENT" means that certain Agreement and Plan of
Merger by and among Company, Holdings, Merger Sub, Heritage Partners Management
Company, LLP, as the agent for the Sellers, and Heritage Fund II, L.P., a
Delaware limited partnership, and Heritage Investors II, L.L.C., a Delaware
limited liability company, as the Warrantholders (as such term is defined in the
Acquisition Agreement), dated as of October 22, 2005, in the form delivered to
Administrative Agent and Lenders prior to their execution of this Agreement and
as such agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.12B.


                                        2



          "ACQUISITION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary (i) to finance the payment of all consideration payable under
the Acquisition Agreement and (ii) to pay Acquisition Transaction Costs.

          "ACQUISITION RESERVE AMOUNT" means an amount equal to the excess of
(a) the face amount of the Senior Subordinated Notes issued on or before the
Effective Date or, if the Senior Subordinated Notes are not issued on or before
the Effective Date, the amount funded under the Bridge Facility over (b)
$169,000,000.

          "ACQUISITION TRANSACTION COSTS" means the non-recurring direct or
indirect fees, costs and expenses including any penalties or premiums payable by
Company on, before or within sixty days after the Effective Date in connection
with the Transactions in an amount not to exceed $20,000,000.

          "ADDITIONAL MORTGAGED PROPERTY" has the meaning set forth in
subsection 6.9.

          "ADDITIONAL MORTGAGES" has the meaning set forth in subsection 6.9.

          "ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.

          "AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.

          "AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.

          "AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

          "AGENTS" means Administrative Agent, Collateral Agent and Lead
Arranger.

          "AGREEMENT" means this Second Amended and Restated First Lien Credit
Agreement dated as of December 27, 2005.

          "APPLICABLE MARGIN" means (a) with respect to any Term Loan, 1.75% per
annum in the case of a Term Loan that is a Base Rate Loan and 2.75% per annum in
the case of a Term Loan that is a Eurodollar Rate Loan and (b) with respect to
any Revolving Loan, the rate per annum set forth in the table below under the
caption "Applicable Margin for Eurodollar Rate Loans" or "Applicable Margin for
Base Rate Loans", as the case may be, opposite the Consolidated Leverage Ratio
for the four-Fiscal Quarter period for which the applicable Pricing Certificate
has been delivered pursuant to subsection 6.1(v):


                                        3





                         Consolidated    Applicable Margin for   Applicable Margin for Base
                        Leverage Ratio   Eurodollar Rate Loans           Rate Loans
                        --------------   ---------------------   --------------------------
                                                        
Greater than               3.50:1.00             2.75%                      1.75%

Equal to
or less than               3.50:1.00
but greater than           2.50:1.00             2.50%                      1.50%

Equal to
or less than               2.50:1.00
but greater than           1.50:1.00             2.25%                      1.25%

Equal to or less than      1.50:1.00             2.00%                      1.00%


; provided that until the delivery of financial statements pursuant to
subsection 6.1(iv) and a Pricing Certificate pursuant to subsection 6.1(v), in
each case covering the fiscal period ending on December 31, 2005 the Applicable
Margin for Revolving Loans that are Eurodollar Rate Loans shall be 2.75% per
annum and the Applicable Margin for Revolving Loans that are Base Rate Loans
shall be 1.75% per annum; provided further that upon delivery of each Pricing
Certificate by Company to Administrative Agent pursuant to subsection 6.1(v)
covering any fiscal period ending after December 31, 2005 the Applicable Margin
for Revolving Loans that are Eurodollar Rate Loans and the Applicable Margin for
Revolving Loans that are Base Rate Loans shall automatically be adjusted in
accordance with such Pricing Certificate, such adjustment to become effective on
the next succeeding Business Day following the receipt by Administrative Agent
of such Pricing Certificate; provided further that, if at any time a Pricing
Certificate is not delivered at the time required pursuant to subsection 6.1(v),
from the time such Pricing Certificate was required to be delivered until the
Business Day next succeeding delivery of such Pricing Certificate, the
applicable margins shall be the maximum percentage amount for the relevant Loan
set forth above.

          "APPROVED FUND" means a Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

          "ASSET SALE" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of the Subsidiary Guarantors of (i) any of
the Equity Interests of any of Company's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries (other than (a) inventory sold in the
ordinary course of


                                        4



business, (b) sales, assignments, transfers or dispositions of accounts in the
ordinary course of business for purposes of collection and (c) any such other
assets to the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to $500,000 or less).

          "ASSIGNMENT AGREEMENT" means an Assignment and Assumption in
substantially the form of Exhibit XI annexed hereto.

          "BANKRUPTCY CASES" means Case No. LA 01 39678BB through LA 01 39697BB
and LA 01 45516BB, LA 01 45520BB and LA 01 45525BB, in the United States
Bankruptcy Court for the Central District of California, Los Angeles Division,
which were the bankruptcy proceeding related to Company and certain of its
Subsidiaries.

          "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

          "BASE RATE" means, at any time, the higher of (i) the Prime Rate or
(ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
Any change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change.

          "BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.

          "BRIDGE FACILITY" means a senior subordinated increasing rate bridge
loan facility in an original principal amount not to exceed $200,000,000
provided pursuant to the Bridge Loan Agreement.

          "BRIDGE LOAN AGREEMENT" means the Bridge Loan Agreement as in effect
on the Effective Date and as such Bridge Loan Agreement may be amended from time
to time thereafter to the extent permitted under subsection 7.12B.

          "BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or California or is a day
on which banking institutions located in New York, New York or Los Angeles,
California are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans,
any day that is a Business Day described in clause (i) above and that is also a
day for trading by and between banks in Dollar deposits in the London interbank
market.

          "CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.

          "CASH" means money, currency or a credit balance in a Deposit Account.


                                        5



          "CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (v) shares of any money market mutual fund that (a) has
at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i), (ii) and (iii) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's; and (vi) repurchase agreements with a term of not more than 30 days for
the types of investments referred to in clause (i) or (ii) above with any Lender
or any commercial bank referred to in clause (iv).

          "CERTIFICATE OF MERGER" means the Certificate of Merger as in effect
on the Effective Date and as such certificate may be amended from time to time
thereafter to the extent permitted under subsection 7.12B.

          "CHANGE IN CONTROL" means:

          (a) prior to an initial public offering of any of Holdings' Equity
Securities, 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 an initial public offering of any of Holdings' Equity
Securities, 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 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


                                        6



          (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.

          "CLASS", as applied to Lenders, means each of the following two
classes of Lenders: (i) Lenders having Revolving Loan Exposure and (ii) Lenders
having Term Loan Exposure.

          "CLOSING DATE" means June 15, 2005, the date on which the initial
Loans were made.

          "CLOSING DATE MORTGAGED PROPERTIES" means collectively the Existing
Mortgaged Properties.

          "CLOSING DATE MORTGAGES" means collectively the Existing Mortgages.

          "COLLATERAL" means, collectively, all of the real, personal and mixed
property in which Liens are purported to be granted pursuant to the Collateral
Documents as security for the Obligations.

          "COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Security Agreement.

          "COLLATERAL AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Collateral Agent appointed pursuant to subsection 9.5A.

          "COLLATERAL DOCUMENTS" means the Security Agreement, the Foreign
Pledge Agreements, the Deposit Account Instruction Agreements, the Mortgages,
the Control Agreements and all other instruments or documents delivered by any
Loan Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Collateral Agent, on behalf of Lenders, a Lien on any real,
personal or mixed property of that Loan Party as security for the Obligations.

          "COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.

          "COMMITMENTS" means the commitments of Lenders to make Revolving Loans
and Swing Line Loans as set forth in subsections 2.1A and 3.3 and, to the extent
applicable, the Term Loan Commitments.

          "COMPANY" means Skilled Healthcare Group, Inc., a Delaware
corporation.


                                        7



          "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VIII annexed hereto.

          "COMPLIANCE PROGRAM" means a corporate compliance program that is
modeled after the requirements of the Federal Sentencing Guidelines and is based
upon the applicable OIG Compliance Program Guidance (for example, the OIG
Compliance Program Guidance for Hospitals at 63 Fed. Reg. 8987 (Feb. 23, 1998)).

          "CONFIDENTIAL INFORMATION MEMORANDUM" means the Confidential
Information Memorandum dated May 2005 prepared by Lead Arranger relating to the
credit facilities evidenced by this Agreement.

          "CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent and Collateral Agent (which writing has been delivered and is reasonably
acceptable to Administrative Agent and Collateral Agent), whether under the
terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to permit the encumbrance of the leasehold interest and
the transfer of the leasehold interest in a foreclosure, to give Administrative
Agent notice of default and a reasonable opportunity to cure and such other
matters as Administrative Agent shall reasonable request which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.

          "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum of
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries; provided that Consolidated Capital Expenditures shall not include
any expenditures incurred in connection with (i) any Converted Capital Lease;
(ii) the exercise by any Loan Party of a purchase option under any lease with
respect to any existing Facility; or (iii) any Permitted Acquisition. For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in or sale of existing equipment or with insurance
proceeds shall be included in Consolidated Capital Expenditures only to the
extent of the gross amount of such purchase price less the credit granted by the
seller of such equipment for the equipment being traded in at such time or the
amount of such proceeds, as the case may be.

          "CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense on Indebtedness of Company and its Subsidiaries
for such period excluding, however, any interest expense not payable in Cash
(including amortization of discount and amortization of debt issuance costs).

          "CONSOLIDATED CURRENT ASSETS" means, as at any date of determination,
(i) the total assets of Company and its Subsidiaries on a consolidated basis
which may properly be classified as current assets in conformity with GAAP
(excluding Cash and Cash Equivalents) plus (ii) Cash, Cash Equivalents and
investments held in restricted accounts plus (iii) deposits


                                        8



made by Company and its Subsidiaries on Operating Leases and Capital Leases and
other deposits made in the ordinary course of business plus (iv) investments in
APS-Summit Care Pharmacy, LLC.

          "CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, (i) the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portions of Indebtedness that by its
terms matures more than one year from the date of its creation and Capital
Leases plus (ii) long term liabilities related to accrued insurance.

          "CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
total depreciation expense, (v) total amortization expense, (vi) other non-cash
expenses (other than any such non-cash expense to the extent it represents an
accrual of or reserve for cash expenditures in any future period), (vii)
Consolidated Restructuring Costs, (viii) gains and losses from the sale of fixed
assets, (ix) Existing Transaction Costs and Acquisition Transaction Costs, (x)
Consolidated Financing Fees, (xi) customary fees, costs and expenses incurred in
connection with any equity or debt offering, Investment, recapitalization or
Indebtedness (in each case, as permitted by this Agreement) or in connection
with the consummation of Permitted Acquisitions, (xii) fees and expenses in
connection with the exchange of the Senior Subordinated Notes for registered
notes with identical terms as contemplated by the Senior Subordinated Notes
Indenture, (xiii) costs and expenses incurred in connection with the
establishment and initial implementation of policies and procedures for
complying with the Sarbanes-Oxley Act of 2002; provided that the aggregate
amount of such costs and expenses included pursuant to this clause (xiii) shall
not exceed $2,500,000 in the aggregate, (xiv) other non-recurring or
extraordinary costs and expenses (including, without limitation, non-recurring
startup losses incurred in connection with Permitted Acquisitions or initial
opening of facilities), and costs attributable to discontinued operations
(including, without limitation, operations disposed of during such period,
whether or not such operations were classified as discontinued) incurred in such
period, provided that the aggregate amount of such costs included pursuant to
this clause (xiv) shall not exceed $3,500,000 in any one Fiscal Year, and (xv)
management fees paid to Onex or any Affiliate of Onex, to the extent such fees
are permitted to be paid pursuant to subsection 7.9, but only, in the case of
clauses (ii)-(xv), to the extent included in the calculation of Consolidated Net
Income, less non-cash income added in the calculation of Consolidated Net Income
(other than any such non-cash income to the extent it will result in the receipt
of cash payments in any future period), all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.

          "CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitment Amount is permanently reduced in connection with such repayments),
(b) Consolidated Capital Expenditures (net of any proceeds of any related


                                        9



financings with respect to such expenditures), (c) Consolidated Cash Interest
Expense, (d) taxes based on income of Company and its Subsidiaries and paid in
cash during such period, (e) Consolidated Restructuring Costs paid in cash, (f)
Investments made in cash during such period and permitted pursuant to subsection
7.3(vi) or 7.3(vii) net of proceeds of any related financings, (g) cash paid by
Holdings or any of its Subsidiaries upon the exercise of a purchase option under
any lease with respect to any existing Facility, (h) cash paid by Holdings to
repurchase Equity Interests, to the extent permitted pursuant to subsection
7.5(ii)(d), and (i) the amounts described in clauses (ix) through (xv) of the
definition of "Consolidated EBITDA" to the extent paid in cash in such period
and included in Consolidated EBITDA for such period.

          "CONSOLIDATED FINANCING FEES" means any amounts referred to in
subsection 2.3 of this Agreement, or the corresponding provisions of the
Original First Lien Credit Agreement, the Original Second Lien Credit Agreement,
the Existing First Lien Credit Agreement or the Existing Second Lien Credit
Agreement, in each case only to the extent paid in cash.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, net costs under Interest Rate Agreements and amounts referred to in
subsection 2.3 paid to Administrative Agent and Lenders that are considered
interest expense in accordance with GAAP, but excluding, however, any
Consolidated Financing Fees.

          "CONSOLIDATED LEVERAGE RATIO" means, as of the last day of any Fiscal
Quarter, the ratio of (i) Consolidated Total Debt as at such day to (ii)
Consolidated EBITDA, calculated on a Pro Forma Basis, for the consecutive four
Fiscal Quarters ending on such day. With respect to periods on or prior to five
Business Days following the earlier of (A) the date on which the acquisition
permitted pursuant to subsection 7.3(xiii) is consummated and (B) March 31,
2006, the foregoing ratio shall be calculated by subtracting from Consolidated
Total Debt the lesser of (X) all Cash and Cash Equivalents held by any Loan
Party subject to a First Priority Lien in favor of the Collateral Agent and (Y)
the Acquisition Reserve Amount.

          "CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company or APS - Summit Care Pharmacy L.L.C., a Delaware limited
liability company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or


                                       10



governmental regulation applicable to that Subsidiary, except to the extent of
the amount of dividends or other distributions actually paid to Company or any
of its Subsidiaries by such Person during such period, (iv) any after-tax gains
or losses attributable to asset sales or returned surplus assets of any Pension
Plan, and (v) (to the extent not included in clauses (i) through (iv) above) any
net extraordinary gains or losses.

          "CONSOLIDATED RESTRUCTURING COSTS" means, for any period,
restructuring and/or reorganization costs related to the Bankruptcy Cases
incurred by Company and its Subsidiaries during such period, calculated in
accordance with GAAP; provided that the aggregate amount of such costs for any
consecutive four Fiscal Quarter period shall not exceed $1,000,000.

          "CONSOLIDATED REVENUES" means, for any period, an amount equal to the
revenues of Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that, for purposes of such determination, the
revenues of any Permitted Acquisition made during such period shall be
determined on a pro forma basis as if such Permitted Acquisition had been
consummated on the first day of such period.

          "CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
sum of the aggregate stated balance sheet amount of all Indebtedness of Company
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.

          "CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.

          "CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.

          "CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or


                                       11



any balance sheet item, level of income or financial condition of another if, in
the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.

          "CONTINUING MEMBER" means, as of any date of determination any member
of the Governing Body of Holdings who (i) was a member of such Governing Body on
the Effective Date, (ii) was nominated for election or elected to such Governing
Body with the affirmative vote of a majority of the members who were either
members of such Governing Body on the Effective Date or whose nomination or
election was previously so approved or (iii) was nominated by a Permitted
Holder.

          "CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its material properties is
bound or to which it or any of its material properties is subject.

          "CONTROL AGREEMENT" means an agreement, reasonably satisfactory in
form and substance to Administrative Agent and Collateral Agent and executed by
the financial institution or securities intermediary at which a Deposit Account
or a Securities Account, as the case may be, is maintained, pursuant to which
such financial institution or securities intermediary confirms and acknowledges
Collateral Agent's security interest in such account, and agrees that the
financial institution or securities intermediary, as the case may be, will
comply with instructions originated by Collateral Agent as to disposition of
funds in such account, without further consent by Company or any Subsidiary.

          "CONVERTED CAPITAL LEASE" means a Capital Lease that was converted
from an Operating Lease (whether such conversion occurs as the result of an
amendment or modification of an existing Operating Lease or of a Loan Party
entering into a new lease with respect to any existing Facility).

          "CS" has the meaning assigned to that term in the introduction to this
Agreement.

          "CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.

          "DEFAULTING REVOLVING LENDER" means any Revolving Lender that fails to
(i) fund a Revolving Loan for the purpose of repaying any Refunded Swing Line
Loan pursuant to subsection 2.1A(iii)(b), (ii) purchase an assignment of an
unpaid Swing Line Loan pursuant to subsection 2.1A(iii)(c), (iii) fund a
Revolving Loan for the purpose of repaying any unreimbursed amounts of a drawing
under a Letter of Credit pursuant to subsection 3.3B or (iv) fund a
participation in any such unreimbursed Letter of Credit drawing pursuant to
subsection 3.3C


                                       12



          "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or similar
account maintained with a Person engaged in the business of banking, including a
savings bank, savings and loan association, credit union or trust company.

          "DEPOSIT ACCOUNT INSTRUCTION AGREEMENT" means an agreement, which may
be terminated upon reasonable notice to Collateral Agent, reasonably
satisfactory in form and substance to Administrative Agent and Collateral Agent
and executed by Company or a Subsidiary of Company and the financial institution
at which a Government Reimbursement Deposit Account is maintained, pursuant to
which such financial institution agrees that it will, on a daily basis (or such
other periodic basis as may be reasonably acceptable to Collateral Agent),
transfer, without further instruction from Company or any such Subsidiary, all
funds that at such time are on deposit in such Government Reimbursement Deposit
Account to a Deposit Account specified in such agreement, which Deposit Account
is subject to a Control Agreement.

          "DOLLARS" and the sign "$" mean the lawful money of the United States
of America.

          "DOMESTIC SUBSIDIARY" means any Subsidiary of Company that is
incorporated or organized under the laws of the United States of America, any
state thereof or in the District of Columbia.

          "DRAWING DATE" has the meaning assigned to that term in subsection
3.3B.

          "DRAWING NOTICE" has the meaning assigned to that term in subsection
3.3B.

          "EFFECTIVE DATE" has the meaning set forth in subsection 4.1.

          "ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any Lender
and any Approved Fund of any Lender; and (ii) (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act) that extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; provided that neither Company nor any Affiliate of Company
shall be an Eligible Assignee.

          "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.

          "ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional


                                       13



or otherwise), by any Government Authority or any other Person, arising (i)
pursuant to or in connection with any actual or alleged violation of any
Environmental Law, (ii) in connection with any Hazardous Materials or any actual
or alleged Hazardous Materials Activity, or (iii) in connection with any actual
or alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.

          "ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene or the protection of human, plant or animal health or
welfare, in any manner applicable to Company or any of its Subsidiaries or any
Facility.

          "EQUITY INTERESTS" means the capital stock of or other equity
interests in a Person.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.

          "ERISA AFFILIATE", as applied to any Person, means (i) any corporation
that is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) that is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of a Person or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of such Person
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of such Person or such Subsidiary and
with respect to liabilities arising after such period for which such Person or
such Subsidiary could be liable under the Internal Revenue Code or ERISA.

          "ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure of Company, any of its Subsidiaries or any
of their respective ERISA Affiliates to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
Pension Plan in a distress


                                       14



termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability to Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4063 or 4064 of ERISA, respectively; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which would constitute grounds for the termination of, or the
appointment of a trustee to administer, any Pension Plan under Section 4042 of
ERISA; (vi) the imposition of liability on Company, any of its Subsidiaries or
any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA, respectively) from any Multiemployer Plan if there is
any direct or indirect liability to Company, any of its Subsidiaries or any of
their respective ERISA Affiliates therefor, or the receipt by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that such Multiemployer Plan is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, respectively, or that such
Multiemployer Plan intends to terminate or has terminated under Section 4041A or
4042 of ERISA, if there is any liability to Company, any of its Subsidiaries or
any of their respective ERISA Affiliates therefor; (viii) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan (other than a Multiemployer Plan) intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (ix) the imposition of a Lien on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

          "EURODOLLAR RATE" means, for any Interest Rate Determination Date,
with respect to any Eurodollar Rate Loan for any Interest Period, the rate per
annum obtained by dividing (i) the rate per annum determined by Administrative
Agent at approximately 11:00 a.m. (London time) on the date that is two Business
Days prior to the beginning of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rate for deposits in Dollars (as set
forth by any service selected by Administrative Agent which has been nominated
by the British Bankers' Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition the "Eurodollar Rate" shall be
the interest rate per annum determined by Administrative Agent to be the average
of the rates per annum at which deposits in Dollars are offered for such
Interest Period to major banks in the London interbank market in London, England
at approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of such Interest Period by (ii) a percentage equal to
100% minus the stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D (or
any successor category of liabilities


                                       15



under Regulation D). Each determination by Administrative Agent pursuant to this
definition shall be conclusive absent manifest error.

          "EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Eurodollar Rate as provided in subsection 2.2A.

          "EVENT OF DEFAULT" means each of the events set forth in Section 8.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "EXCLUDED TAX" means, in the case of a Lender or Administrative Agent,
(i) taxes that are imposed on the overall net income or net profits (including
franchise or other similar taxes imposed in lieu thereof) (a) by the United
States, (b) by any other Government Authority under the laws of which such
Lender or Administrative Agent is organized or has its principal office or
maintains its applicable lending office, or (c) by any jurisdiction solely as a
result of a present or former connection between such Lender or Administrative
Agent and such jurisdiction (other than any such connection arising solely from
such Lender or Administrative Agent having executed, delivered or performed its
obligations or received a payment under, or enforced, any of the Loan
Documents), and (ii) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which such Lender or
Administrative Agent is located.

          "EXISTING FIRST LIEN CREDIT AGREEMENT" means the Amended and Restated
First Lien Credit Agreement, dated as of June 15, 2005, as amended to the date
hereof, by and among Company, the financial institutions party thereto as
lenders, Wells Fargo Foothill, Inc., as syndication agent, CapitalSource Finance
LLC, as documentation agent, and CS, as administrative agent and collateral
agent.

          "EXISTING FIRST LIEN LOAN DOCUMENTS" means the "Loan Documents" as
defined in the Existing First Lien Credit Agreement.

          "EXISTING LENDERS" has the meaning assigned to that term in the
recitals to this Agreement.

          "EXISTING MORTGAGE" means each Mortgage executed in connection with
the Existing First Lien Credit Agreement encumbering an Existing Mortgaged
Property.

          "EXISTING MORTGAGED PROPERTIES" means collectively Existing Mortgages
encumbering the Real Property Assets listed in Schedule 1.1.

          "EXISTING REQUISITE LENDERS" means Existing Lenders having or holding
more than 50% of the sum of the aggregate Term Loan Exposure of all Lenders plus
the aggregate Revolving Loan Exposure of all Lenders.

          "EXISTING SECOND LIEN CREDIT AGREEMENT" means the Amended and Restated
Second Lien Credit Agreement, dated as of June 15, 2005, as amended to the date
hereof, by and


                                       16



among Company, the financial institutions from time to time party thereto as
lenders and CS, as syndication agent, administrative agent and collateral agent.

          "EXISTING TRANSACTION COSTS" means the fees, costs and expenses
including any penalties or premiums payable by Company on or before the Closing
Date, in an aggregate amount not to exceed $15,000,000, in connection with the
refinancing of Company's indebtedness using the proceeds of the Existing First
Lien Credit Agreement and the Existing Second Lien Credit Agreement, redemption
of the Series A Preferred Stock of Company (as defined in the Existing First
Lien Credit Agreement) and issuance of a dividend to the holders of capital
stock of Company using the proceeds of the Existing First Lien Credit Agreement,
the Existing Second Lien Credit Agreement and existing Cash of Company.

          "FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.

          "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.

          "FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).

          "FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Liens permitted pursuant to subsection 7.2A (excluding Liens described in
clause (vii) thereof)) and (ii) such Lien is the only Lien (other than Liens
permitted pursuant to subsection 7.2A) to which such Collateral is subject.

          "FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.

          "FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.

          "FLOOD HAZARD PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property located in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards.

          "FOREIGN PLEDGE AGREEMENT" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States,
executed on the Closing Date or from time to time thereafter in accordance with
subsection 6.8 by Company or


                                       17



any Domestic Subsidiary that owns Equity Interests of one or more Foreign
Subsidiaries organized in such country, in form and substance reasonably
satisfactory to Administrative Agent.

          "FOREIGN SUBSIDIARY" means any Subsidiary of Company that is not a
Domestic Subsidiary.

          "FUND" means any Person (other than a natural Person) that is (or will
be) engaged primarily in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.

          "FUNDING AND PAYMENT ACCOUNT" means the account specified in the
payment instructions appearing below Administrative Agent's signature herein or
at the account designated as such in any other written notice delivered by
Administrative Agent to Company and each Lender.

          "FUNDING AND PAYMENT OFFICE" means the office of Administrative Agent
located at Eleven Madison Avenue, New York, New York 10010 or such other office
of Administrative Agent as may from time to time hereafter be designated as such
in a written notice delivered by Administrative Agent to Company and each
Lender.

          "FUNDING DATE" means the date of funding of a Loan.

          "GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.

          "GOVERNING BODY" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust, limited liability company,
association, Joint Venture or other business entity.

          "GOVERNMENT AUTHORITY" means any political subdivision or department
thereof, any other governmental or regulatory body, commission, central bank,
board, bureau, organ or instrumentality or any court, in each case whether
federal, state, local or foreign (including supra-national bodies such as the
European Union or the European Central Bank).

          "GOVERNMENTAL AUTHORIZATION" means any permit, license, registration,
authorization, plan, directive, accreditation, consent, order or consent decree
of or from, or notice to, any Government Authority.

          "GOVERNMENT REIMBURSEMENT DEPOSIT ACCOUNT" means a Deposit Account
into which proceeds of receivables from Government Reimbursement Programs are
deposited.


                                       18



          "GOVERNMENT REIMBURSEMENT PROGRAM" means (i) the Medicare program
established under the Title XVIII of the Federal Social Security Act, the
Federal Employees Health Benefit Program under 5 U.S.C. Sections 8902 et seq.,
the TRICARE program established by the Department of Defense under 10 U.S.C.
Sections 1071 et seq. or the Civilian Health and Medical Program of the
Uniformed Services under 10 U.S.C. Sections 1079 and 1086, (ii) the Medicaid
program of any state or the District of Columbia acting pursuant to a health
plan adopted pursuant to title XIX of the Federal Social Security Act or (iii)
any agent, administrator intermediary or carrier for any of the foregoing.

          "HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Government Authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.

          "HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.

          "HEALTHCARE AUTHORIZATIONS" means any and all Governmental
Authorizations and permits, licenses, authorizations, certificates, certificates
of need, accreditations and plans of third-party accreditation agencies (such as
the Joint Commission on Accreditation of Healthcare Organizations) and
Nongovernmental Payors (i) necessary to enable Company or any of its
Subsidiaries to engage in the Healthcare Service Business, participate in and
receive payment under Government Reimbursement Programs and plans of
Nongovernmental Payors or otherwise continue to conduct its business as it is
conducted on the Effective Date or (ii) required under any Law relating to any
Government Reimbursement Program or Law applicable to HMOs, healthcare-related
insurance companies, or Persons engaged in the Healthcare Service Business.


                                       19



          "HEALTHCARE REGULATIONS" means any and all current or future Laws
relating to HMOs, healthcare service providers, Government Reimbursement
Programs, Persons engaged in the Healthcare Service Business, healthcare-related
insurance companies, or any other similar Person and any rule, regulation,
directive, order or decision promulgated or issued pursuant thereto. Healthcare
Regulations shall include the Food, Drug and Cosmetic Act (21 U.S.C. Section 301
et seq.), the federal anti-kickback statute (42 U.S.C. Section 1320a-7b), the
False Claims Act (31 U.S.C. Sections 3729 et seq.), the Health Insurance
Portability and Accountability Act of 1996 (Pub. L. No. 104-191, 110 Stat. 1936
(1996)) and the federal physician self-referral laws (42 U.S.C. Section 1395nn).

          "HEALTHCARE SERVICE BUSINESS" means a business, the majority of whose
revenues are derived from providing or arranging to provide or administering,
managing or monitoring healthcare services, long-term care or any business or
activity that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.

          "HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.

          "HMO" means any person doing business as a health maintenance
organization (or required to qualify or be licensed as such) under applicable
Healthcare Regulations.

          "HOLDINGS" has the meaning assigned to that term in the introduction
to this Agreement.

          "HOLDINGS CERTIFICATE OF DESIGNATIONS" means the provisions of
Holdings' Restated Certificate of Incorporation or Certificate of Designations,
Preferences, Restrictions and Rights of Preferred Stock, as applicable, relating
to the Holdings Preferred Stock, as in effect on the Effective Date.

          "HOLDINGS COMMON STOCK" means the common stock of Holdings.

          "HOLDINGS PREFERRED STOCK" means the 8.0% Accreting Preferred Stock of
Holdings, par value $0.01 per share, with a liquidation preference of $10,000
per share and with the other terms set forth in the Holdings Certificate of
Designations.

          "HOLDINGS SECURITY AGREEMENT" means the Security Agreement executed
and delivered by Holdings on the Effective Date, substantially in the form of
Exhibit XVII annexed hereto.

          "INCREASED REVOLVING LOAN COMMITMENT" means the $25,000,000 of
increased Revolving Loan Commitments effected pursuant to this Agreement.

          "INCREASING REVOLVING LENDERS" means those Existing Lenders with
Revolving Loan Commitments under the Existing First Lien Credit Agreement that
have agreed to accept a portion of the Increased Revolving Loan Commitment.


                                       20



          "INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) Synthetic Lease Obligations, and (vi) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person; provided that for
purposes of this definition the Holdings Preferred Stock shall not constitute
Indebtedness. Obligations under Interest Rate Agreements and Currency Agreements
constitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2)
in all other cases, Investments, and in neither case constitute Indebtedness.

          "INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 10.3.

          "INDEMNIFIED TAX" means any Tax other than an Excluded Tax.

          "INDEMNITEE" has the meaning assigned to that term in subsection 10.3.

          "INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.

          "INTERCREDITOR AGREEMENT" means the Amended and Restated Intercreditor
Agreement, dated as of June 15, 2005, by and among Company, the Subsidiary
Guarantors, Collateral Agent and the Second Lien Collateral Agent.

          "INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
the last Business Day of each of March, June, September and December of each
year, commencing with September 30, 2005, and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided that in the case of each Interest Period of longer than three
months "Interest Payment Date" shall also include each date that is three
months, or a multiple thereof, after the commencement of such Interest Period.

          "INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.

          "INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.

          "INTEREST RATE DETERMINATION DATE", with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.


                                       21


          "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.

          "INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of the Subsidiary Guarantors, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment (other than adjustments for the
repayment of, or the refund of capital with respect to, the original amount of
any such Investment).

          "IP COLLATERAL" means, collectively, the Intellectual Property that
constitutes Collateral under the Security Agreement.

          "IP FILING OFFICE" means the United States Patent and Trademark
Office, the United States Copyright Office or any successor or substitute office
in which filings are necessary or, in the opinion of Administrative Agent,
desirable in order to create or perfect Liens on any IP Collateral.

          "ISSUING LENDER", with respect to any Letter of Credit, means the
Lender that agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).

          "JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.

          "LANDLORD CONSENT AND ESTOPPEL", with respect to any Leasehold
Property, means a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and substance to
Administrative Agent and Collateral Agent.

          "LAW" means any constitutional provision, statute or other law, code,
ordinance, rule, regulation, Governmental Authorization or interpretation of any
Governmental Authority or any decree, decision, notice, injunction, judgment,
order, ruling, assessment or writ of any Governmental Authority.

          "LEAD ARRANGER" means CS in its capacity as sole lead arranger and
sole bookrunner.


                                       22



          "LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property.

          "LENDER" and "LENDERS" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.

          "LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company or any Subsidiary of Company pursuant to subsection
3.1.

          "LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving
Loans pursuant to subsection 3.3B or otherwise reimbursed by Company.

          "LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, call, trust or other
preferential arrangement having the practical effect of any of the foregoing.

          "LOAN" or "LOANS" means one or more Term Loans and one or more of the
Loans made by Lenders to Company pursuant to subsection 2.1A.

          "LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for or other documents or certificates executed by
Company in favor of an Issuing Lender relating to, the Letters of Credit), the
Subsidiary Guaranty, the Collateral Documents, the Acknowledgment and Consent,
the Restatement Consent and all amendments, waivers and consents relating
thereto.

          "LOAN PARTY" means each of Holdings, Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "LOAN PARTIES"
means all such Persons, collectively.

          "MANAGEMENT EXCHANGE AGREEMENTS" means the agreement or agreements
dated on or prior to the Effective Date between Holdings and those members of
management of Company with respect to exchanging Equity Interests of Company for
Equity Interests of Holdings, in each case as in effect on the Effective Date.

          "MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.


                                       23



          "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings, Company and its Subsidiaries taken as a whole or (ii) the
impairment in any material respect of the ability of any Loan Party to perform,
or of Administrative Agent or Lenders to enforce, the Obligations.

          "MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property (i) with
annual rent payable thereunder of $350,000 or more or (ii) with respect to which
both the lessor and lessee are Loan Parties.

          "MATERIAL SUBSIDIARY" means (a) each Subsidiary of Company that (i)
for the most recent Fiscal Year accounted for more than 3% of the Consolidated
Revenues of Company and its Subsidiaries or (ii) as at the end of such Fiscal
Year, was the owner of more than 3% of the consolidated assets of Company and
its Subsidiaries or (b) any Subsidiaries of Company which, in the aggregate, (i)
for the most recent Fiscal Year accounted for more than 5% of the Consolidated
Revenues of Company and its Subsidiaries or (ii) as at the end of such Fiscal
Year, were the owners of more than 5% of the consolidated assets of Company and
its Subsidiaries.

          "MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES AMOUNT" has the meaning
assigned to that term in subsection 7.8.

          "MERGER" means the merger of Merger Sub with and into Company in
accordance with the terms of the Acquisition Agreement and the Certificate of
Merger, with Company being the surviving corporation.

          "MERGER SUB" means SHG Acquisition Corp., a Delaware corporation.

          "MOODY'S" means Moody's Investor Services, Inc. or any successor
thereto.

          "MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of Exhibit XV annexed hereto or in
such other form as may be approved by Administrative Agent in its reasonable
discretion, in each case with such changes thereto as may be reasonably
recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices or (ii) at Administrative
Agent's option, in the case of an Additional Mortgaged Property, an amendment to
an existing Mortgage, in form reasonably satisfactory to Administrative Agent,
adding such Additional Mortgaged Property to the Real Property Assets encumbered
by such existing Mortgage. "MORTGAGES" means all such instruments, including the
Closing Date Mortgages and any Additional Mortgages, collectively.

          "MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA and is subject to
Title IV of ERISA.

          "NET ASSET SALE PROCEEDS", with respect to any Asset Sale, means Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from


                                       24



such Asset Sale, net of any bona fide direct costs incurred in connection with
such Asset Sale, including (i) income taxes reasonably estimated to be actually
payable within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is (a) secured by a Lien on the stock
or assets in question and that is required to be repaid under the terms thereof
as a result of such Asset Sale and (b) actually paid at the time of receipt of
such cash payment to a Person that is not an Affiliate of any Loan Party or an
Affiliate of any Affiliate of a Loan Party.

          "NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Domestic Subsidiaries (i) under any
casualty insurance policy in respect of a covered loss thereunder or (ii) as a
result of the taking of any assets of Company or any of its Subsidiaries by any
Person pursuant to the power of eminent domain, condemnation or otherwise, or
pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, in each case net of any bona fide direct costs incurred
by Company or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof,
including (x) income taxes reasonably estimated to be realized within two years
of the date of such adjustment or settlement as a result of any gain recognized
in connection therewith and (y) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) that is (A) secured by a Lien on the assets in question and that is
required to be repaid under the terms thereof as a result of such adjustment or
settlement and (B) actually paid at the time of receipt of such cash payment to
a Person that is not an Affiliate of any Loan Party or an Affiliate of any
Affiliate of a Loan Party.

          "NET SECURITIES PROCEEDS" means Cash proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from the (i) issuance
of Equity Interests of or incurrence of Indebtedness by Holdings, Company or any
of its Subsidiaries and (ii) capital contributions made by a holder of Equity
Interests of Holdings.

          "NEW REVOLVING LENDERS" means those Revolving Lenders without a
Revolving Loan Commitment under the Existing First Lien Credit Agreement that
have agreed to accept a portion of the Increased Revolving Loan Commitment.

          "NONGOVERNMENTAL PAYORS" means third-party payors (other than the
Government Reimbursement Programs) that reimburse providers for healthcare goods
and services rendered in the Healthcare Service Business, such as private
insurers and managed care organizations.

          "NON-US LENDER" means a Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof.

          "NOTES" means one or more of the Term Notes, Revolving Notes or Swing
Line Note or any combination thereof.


                                       25



          "NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto.

          "NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto.

          "NOTICE OF PREPAYMENT" means a notice substantially in the form of
Exhibit V annexed hereto.

          "OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.

          "OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.

          "OFFICER'S CERTIFICATE", as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.

          "ONEX" means Onex Corporation, an Ontario corporation, and Onex
Partners LP, a Delaware limited partnership.

          "OPERATING LEASE", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.

          "ORGANIZATIONAL DOCUMENTS" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.

          "ORIGINAL FIRST LIEN CREDIT AGREEMENT" means the First Lien Credit
Agreement, dated as of July 22, 2004, as amended to the date hereof, by and
among Company, the financial institutions from time to time party thereto,
Goldman Sachs Credit Partners L.P., as syndication agent, General Electric
Capital Corporation and Wells Fargo Foothill, Inc., as co-documentation agents
and CS, as administrative agent and collateral agent.

          "ORIGINAL SECOND LIEN CREDIT AGREEMENT" means the Second Lien Credit
Agreement, dated as of July 22, 2004, by and among Company, the financial
institutions from


                                       26



time to time party thereto, Goldman Sachs Credit Partners L.P., as syndication
agent and CS, as administrative agent and collateral agent.

          "PARTICIPANT" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to subsection 10.1C.

          "PATRIOT ACT" means the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act)
Act of 2001.

          "PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.

          "PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

          "PERMITTED ACQUISITION" means collectively, the acquisition of all or
any portion of the business and assets, or all of the Equity Interests, of any
Person which acquisition is permitted pursuant to clause (vi) or (xiii) of
subsection 7.3.

          "PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):

          (i)  Liens for taxes, assessments or governmental charges or claims
          the payment of which is not, at the time, required by subsection 6.3;

          (ii) statutory Liens of landlords, Liens of collecting banks under the
          UCC on items in the course of collection, statutory Liens and rights
          of set-off of banks, statutory Liens of carriers, warehousemen,
          mechanics, repairmen, workmen and materialmen, and other Liens imposed
          by law, in each case incurred in the ordinary course of business (a)
          for amounts not yet overdue by more than thirty days or (b) for
          amounts that are being contested in good faith by appropriate
          proceedings, so long as (1) such reserves or other appropriate
          provisions, if any, as shall be required by GAAP shall have been made
          for any such contested amounts, and (2) in the case of a Lien with
          respect to any portion of the Collateral, such contest proceedings
          conclusively operate to stay the sale of any portion of the Collateral
          on account of such Lien;

          (iii) deposits made in the ordinary course of business in connection
          with workers' compensation, unemployment insurance and other types of
          social security, or to secure the performance of statutory
          obligations, bids, leases, government contracts, trade contracts, and
          other similar obligations (exclusive of obligations for the payment of
          borrowed money), so long as no foreclosure, sale


                                       27




          or similar proceedings have been commenced with respect to any portion
          of the Collateral on account thereof;

          (iv) any attachment or judgment Lien not constituting an Event of
          Default under subsection 8.8;

          (v)  licenses (with respect to Intellectual Property and other
          property), leases or subleases granted to third parties in accordance
          with any applicable terms of the Collateral Documents and not
          interfering in any material respect with the ordinary conduct of the
          business of Company or any of its Subsidiaries or resulting in a
          material diminution in the value of any Collateral as security for the
          Obligations;

          (vi) easements, rights-of-way, restrictions, encroachments, and other
          minor defects or irregularities in title, in each case which do not
          and will not interfere in any material respect with the ordinary
          conduct of the business of Company or any of its Subsidiaries or
          result in a material diminution in the value of any Collateral as
          security for the Obligations;

          (vii) any (a) interest or title of a lessor or sublessor under any
          lease not prohibited by this Agreement, (b) Lien or restriction that
          the interest or title of such lessor or sublessor may be subject to,
          or (c) subordination of the interest of the lessee or sublessee under
          such lease to any Lien or restriction referred to in the preceding
          clause (b), so long as the holder of such Lien or restriction agrees
          to recognize the rights of such lessee or sublessee under such lease;

          (viii) Liens arising from filing UCC financing statements relating
          solely to leases not prohibited by this Agreement;

          (ix) Liens in favor of customs and revenue authorities arising as a
          matter of law to secure payment of customs duties in connection with
          the importation of goods;

          (x)  any zoning or similar law or right reserved to or vested in any
          governmental office or agency to control or regulate the use of any
          real property;

          (xi) Liens granted pursuant to the Collateral Documents;

          (xii) Liens securing obligations (other than obligations representing
          Indebtedness for borrowed money) under operating, reciprocal easement
          or similar agreements entered into in the ordinary course of business
          of Company and its Subsidiaries; and

          (xiii) Liens acceptable to Administrative Agent disclosed as
          exceptions to coverage in the final title policies and endorsements
          issued to Administrative


                                       28



          Agent with respect to the Closing Date Mortgaged Properties and any
          Additional Mortgaged Properties.

          "PERMITTED HOLDERS" means (i) prior to the Effective Date, Heritage
Funds II, L.P., Heritage Funds II, L.L.C. or any officer of any Loan Party or
any of the Permitted Transferees of any of the foregoing Persons, or (ii) on and
after the Effective Date, Onex or any officer of any Loan Party or any of the
Permitted Transferees of any of the foregoing Persons referenced in this clause
(ii).

          "PERMITTED TRANSFEREES" means, with respect to any Person, (i) any
Affiliate of such Person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such Person or (iii) a
trust, the beneficiaries of which, or a corporation or partnership, the
stockholders, or general and limited partners, of which, or a limited liability
company, the members of which, include only such Person or his or her spouse or
lineal descendants, in each case to whom such Person has transferred the
beneficial ownership of any Securities of Company.

          "PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Government Authorities.

          "PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Security Agreement and any Foreign Pledge Agreement.

          "POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.

          "PRICING CERTIFICATE" means an Officer's Certificate of Company
certifying the Consolidated Leverage Ratio as at the last day of any Fiscal
Quarter and setting forth the calculation of such Consolidated Leverage Ratio in
reasonable detail.

          "PRIME RATE" means the rate that CS announces from time to time as its
prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CS or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.

          "PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.

          "PRO FORMA BASIS" means, with respect to compliance with any test or
covenant hereunder, compliance with such test or covenant after giving effect to
(a) the Transactions, (b) any proposed Permitted Acquisition, (c) any Asset Sale
of a Subsidiary or operating entity for which historical financial statements
for the relevant period are available and any related payment of Indebtedness or
(d) any incurrence of Indebtedness (including pro forma adjustments


                                       29



arising out of events which are directly attributable to the proposed Permitted
Acquisition, Asset Sale or incurrence of Indebtedness, are factually supportable
and are expected to have a continuing impact, in each case as determined on a
basis consistent with Article 11 of Regulation S-X of the Securities Act, as
interpreted by the Staff of the Securities and Exchange Commission, and such
other adjustments as are reasonably satisfactory to Administrative Agent, in
each case as certified by the chief financial officer of Company) using, for
purposes of determining such compliance, the historical financial statements of
all entities or assets so acquired or sold and the consolidated financial
statements of Company or any of its Subsidiaries which shall be reformulated as
if such Permitted Acquisitions or Asset Sale, and all other Permitted
Acquisitions or Asset Sales that have been consummated during the period, and
any Indebtedness or other liabilities to be incurred in connection therewith had
been consummated and incurred at the beginning of such period.

          "PRO FORMA COMPLIANCE" means, at any date of determination, that
Company shall be in pro forma compliance with any or all of the covenants set
forth in subsections 7.6A and 7.6B, as applicable, as of (unless otherwise
specifically stated herein) (i) the last day of the most recently completed
Fiscal Quarter, in the case of any event consummated after March 31, 2006, or
(ii) March 31, 2006, in the case of any event consummated on or prior to March
31, 2006, as the case may be (computed on the basis of (a) balance sheet amounts
as of such date and (b) income statement amounts for the most recently completed
period of four consecutive Fiscal Quarters for which financial statements shall
have been delivered to Administrative Agent and calculated on a Pro Forma Basis
in respect of the event giving rise to such determination).

          "PRO RATA SHARE" means (i) with respect to all payments, computations
and other matters relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by dividing (x) the Term Loan Exposure of that
Lender by (y) the aggregate Term Loan Exposure of all Lenders, (ii) with respect
to all payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein deemed purchased by any Lender or any assignments of
any Swing Line Loans deemed purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the sum of the
Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that
Lender by (y) the sum of the aggregate Term Loan Exposure of all Lenders plus
the aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1.

          "REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.

          "RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof,


                                       30



or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, in each case in form sufficient to give such constructive notice upon
recordation and otherwise in form reasonably satisfactory to Administrative
Agent.

          "REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).

          "REGISTER" has the meaning assigned to that term in subsection 2.1D.

          "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

          "REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.

          "RELATED AGREEMENTS" means, collectively, the Acquisition Agreement,
the Certificate of Merger, the Holdings Certificate of Designations, the
Management Exchange Agreements, to the extent the Senior Subordinated Notes are
issued, the Senior Subordinated Note Indenture and, to the extent the Bridge
Facility is funded, the Bridge Loan Agreement.

          "RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.

          "RELEASEE" has the meaning assigned to that term in subsection
10.21B(iii).

          "RELEASOR" has the meaning assigned to that term in subsection
10.21B(iii).

          "REPRICING PREPAYMENT" has the meaning assigned to that term in
subsection 2.2H.

          "REQUEST FOR ISSUANCE" means a request substantially in the form of
Exhibit III annexed hereto.

          "REQUISITE CLASS LENDERS" means, at any time of determination (i) for
the Class of Lenders having Revolving Loan Exposure, Lenders having or holding
more than 50% of the aggregate Revolving Loan Exposure of all Lenders, and (ii)
for the Class of Lenders having Term Loan Exposure, Lenders having or holding
more than 50% of the aggregate Term Loan Exposure of all Lenders.

          "REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.


                                       31



          "RESTATEMENT CONSENT" means the Restatement Consent delivered by
Holdings, Company and its Subsidiaries and Administrative Agent on the Effective
Date, substantially in the form of Exhibit XVIII attached hereto.

          "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company or Holdings now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Company of Holdings now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of Company or Holdings now
or hereafter outstanding and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.

          "REVOLVING LENDER" means a Lender that has a Revolving Loan Commitment
and/or that has an outstanding Revolving Loan.

          "REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.

          "REVOLVING LOAN COMMITMENT AMOUNT" means, at any date, the aggregate
amount of the Revolving Loan Commitments of all Revolving Lenders.

          "REVOLVING LOAN COMMITMENT TERMINATION DATE" means June 15, 2010.

          "REVOLVING LOAN EXPOSURE", with respect to any Revolving Lender,
means, as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, the amount of that Lender's Revolving Loan
Commitment, and (ii) after the termination of the Revolving Loan Commitments,
the sum of (a) the aggregate outstanding principal amount of the Revolving Loans
of that Lender plus (b) in the event that Lender is an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit issued by
that Lender (in each case net of any participations purchased by other Lenders
in such Letters of Credit or in any unreimbursed drawings thereunder) plus (c)
the aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit plus (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any assignments thereof deemed
purchased by other Revolving Lenders) plus (e) the aggregate amount of all
assignments deemed purchased by that Lender in any outstanding Swing Line Loans.

          "REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(ii).


                                       32



          "REVOLVING NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the form of Exhibit VI annexed hereto.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

          "SECOND LIEN COLLATERAL AGENT" has the meaning assigned to that term
in the Intercreditor Agreement.

          "SECOND PRIORITY LIEN" has the meaning assigned to that term in the
Intercreditor Agreement, such Liens being subject to the terms of the
Intercreditor Agreement.

          "SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

          "SECURITIES ACCOUNT" means an account to which a financial asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise the rights that comprise the financial asset.

          "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

          "SECURITY AGREEMENT" means collectively (i) the Amended and Restated
First Lien Security Agreement executed and delivered on the Closing Date,
substantially in the form of Exhibit XIV annexed hereto, and (ii) the Holdings
Security Agreement.

          "SELLERS" means Company, all holders of Company Securities (as defined
in the Acquisition Agreement), John King and Mark Wortley.

          "SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture as in effect
on the Effective Date and as such Indenture may be amended from time to time
thereafter to the extent permitted under subsection 7.12A.

          "SENIOR SUBORDINATED NOTES" means the up to $200,000,000 in aggregate
principal amount of Senior Subordinated Notes of Company issued pursuant to the
Senior Subordinated Note Indenture.

          "SOLVENT", with respect to any Person, means that as of the date of
determination both (i)(a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the


                                       33



amount that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and due considering all financing
alternatives and potential asset sales reasonably available to such Person; (b)
such Person's capital is not unreasonably small in relation to its business or
any contemplated or undertaken transaction; and (c) such Person does not intend
to incur, or believe (nor should it reasonably believe) that it will incur,
debts beyond its ability to pay such debts as they become due; and (ii) such
Person is "solvent" within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

          "STANDBY LETTER OF CREDIT" means any letter of credit or similar
instrument other than a Commercial Letter of Credit.

          "SUBORDINATED INDEBTEDNESS" means any Indebtedness of Company incurred
from time to time and subordinated in right of payment to the Obligations.

          "SUBSIDIARY", with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, Joint Venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the occurrence
of any contingency) to vote in the election of the members of the Governing Body
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.

          "SUBSIDIARY GUARANTOR" means any Subsidiary of Company that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date or
from time to time thereafter pursuant to subsection 6.8.

          "SUBSIDIARY GUARANTY" means the Amended and Restated First Lien
Subsidiary Guaranty executed and delivered by existing Subsidiaries of Company
on the Closing Date and to be executed and delivered by additional Subsidiaries
of Company from time to time thereafter in accordance with subsection 6.8,
substantially in the form of Exhibit XIII annexed hereto.

          "SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that term
in subsection 9.1B.

          "SWAP COUNTERPARTY" means a Lender or the Collateral Agent or an
Affiliate of a Lender or the Collateral Agent that has entered into a Hedge
Agreement with Company or one of its Subsidiaries, the obligations under which
are secured pursuant to the Collateral Documents and guarantied pursuant to the
Subsidiary Guaranty.

          "SWING LINE FUNDING AND PAYMENT OFFICE" means the office of Swing Line
Lender located at Eleven Madison Avenue, New York, New York 10010 or such other
offices of Swing Line Lender as may from time to time be hereafter designated as
such in a written notice delivered by Swing Line Lender to Company and each
other Lender.


                                       34



          "SWING LINE LENDER" means CS, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

          "SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).

          "SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).

          "SWING LINE NOTE" means any promissory note of Company issued pursuant
to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit VII annexed hereto.

          "SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a Person
under (i) a so-called synthetic, off-balance sheet or tax retention lease, or
(ii) an agreement for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

          "TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed, including interest, penalties, additions to tax and any similar
liabilities with respect thereto.

          "TERM LOAN COMMITMENT" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A, and "TERM LOAN COMMITMENTS" means
such commitments of all Lenders in the aggregate.

          "TERM LOAN EXPOSURE", with respect to any Lender, means, as of any
date of determination after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.

          "TERM LOAN MATURITY DATE" means June 15, 2012.

          "TERM LOANS" means the Loans made by Lenders to Company referenced in
subsection 2.1A.

          "TERM NOTES" means any promissory notes of Company issued pursuant to
subsection 2.1E to evidence the Term Loans of any Lenders, substantially in the
form of Exhibit IV annexed hereto.

          "TITLE COMPANY" means one or more title insurance companies reasonably
satisfactory to Administrative Agent.

          "TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans


                                       35



plus (ii) the aggregate principal amount of all outstanding Swing Line Loans
plus (iii) the Letter of Credit Usage.

          "TRANSACTIONS" has the meaning assigned to that term in the recitals
to this Agreement.

          "UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

          "UNASSERTED OBLIGATIONS" means, at any time, Obligations for taxes,
costs, indemnifications, reimbursements, damages and other liabilities (except
for (i) the principal of and interest on, and fees relating to, any Indebtedness
and (ii) contingent reimbursement obligations in respect of amounts that may be
drawn under Letters of Credit) in respect of which no claim or demand for
payment has been made (or, in the case of Obligations for indemnification, no
notice for indemnification has been issued by the Indemnitee) at such time.

     1.2  ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
          UNDER AGREEMENT.

          Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (ii), (iii),
(iv) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(vi), if applicable).
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize GAAP as in effect on the date of determination,
applied in a manner consistent with that used in preparing the financial
statements referred to in subsection 5.3. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
any Loan Document, and Company, Administrative Agent or Requisite Lenders shall
so request, Administrative Agent, Lenders and Company shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of Requisite Lenders),
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and Company shall
provide to Administrative Agent reconciliation statements provided for in
subsection 6.1(vi).

     1.3  OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.

     A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.

     B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.


                                       36



     C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.

     D. Unless otherwise expressly provided herein, references to Organizational
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, in each case which are
not prohibited by this Agreement.

SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

     2.1  COMMITMENTS; MAKING OF LOANS; THE REGISTER; OPTIONAL NOTES.

     A. COMMITMENTS. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Revolving Lender hereby severally agrees to make the Loans as described in
subsections 2.1A(ii) and Swing Line Lender hereby agrees to make the Swing Line
Loans as described in subsection 2.1A(iii).

          (i) Term Loans. Company and the Lenders that have Term Loan Exposure
     agree that the Term Loans advanced pursuant to the Existing First Lien
     Credit Agreement shall remain outstanding (subject to partial prepayment as
     contemplated by this Agreement). The original aggregate principal amount of
     Term Loans was $260,000,000. The amount of each Lender's Term Loan Exposure
     is set forth in the Register; provided that the amount of the Term Loan
     Exposure of each Lender shall be adjusted to give effect to any assignment
     of Term Loans pursuant to subsection 10.1B. Term Loans repaid or prepaid
     may not be reborrowed.

          (ii) Revolving Loans. Each Revolving Lender severally agrees, subject
     to the limitations set forth below with respect to the maximum amount of
     Revolving Loans permitted to be outstanding from time to time, to lend to
     Company Revolving Loans from time to time during the period from the
     Closing Date to but excluding the Revolving Loan Commitment Termination
     Date, an aggregate amount not exceeding its Pro Rata Share of the aggregate
     amount of the Revolving Loan Commitments. Proceeds of the Revolving Loans
     will be used for the purposes identified in subsection 2.5B. The original
     amount of each Revolving Lender's Revolving Loan Commitment (after giving
     effect to this Agreement) is set forth opposite its name on Schedule 2.1
     annexed hereto and the original Revolving Loan Commitment Amount is
     $75,000,000 (reflecting the increase of $25,000,000 in the Revolving Loan
     Commitment Amount on the Effective Date); provided that the amount of the
     Revolving Loan Commitment of each Revolving Lender shall be adjusted to
     give effect to any assignment of such Revolving Loan Commitment pursuant to
     subsection 10.1B and shall be reduced from time to time by the amount of
     any reductions thereto made pursuant to subsection 2.4 and shall be
     increased from time to time by the


                                       37



     amount of any increases thereto made pursuant to subsection 2.1A(iv);
     provided further that no Revolving Loans shall be outstanding immediately
     prior to the Effective Date, and the amount of Revolving Loans made on the
     Effective Date may not exceed $5,000,000. Each Revolving Lender's Revolving
     Loan Commitment shall expire on the Revolving Loan Commitment Termination
     Date and all Revolving Loans and all other amounts owed hereunder with
     respect to the Revolving Loans and the Revolving Loan Commitments shall be
     paid in full no later than that date. Amounts borrowed under this
     subsection 2.1A(ii) may be repaid and reborrowed to but excluding the
     Revolving Loan Commitment Termination Date. Each Increasing Revolving
     Lender and each New Revolving Lender shall, on the Effective Date, purchase
     and assume from the existing Revolving Lenders outstanding Revolving Loans
     and participations in outstanding Letters of Credit so as to cause the
     amount of such Loans and participations in Letters of Credit held by each
     Lender to conform to its Pro Rata Share of the Revolving Loan Commitments
     (it being agreed that Administrative Agent shall have the right to
     unilaterally effect such purchases by either (i) collecting appropriate
     amounts from Increasing Revolving Lenders and New Revolving Lenders and
     distributing appropriate amounts to other Lenders and/or, (ii) with respect
     to any Revolving Loans to be funded on the Effective Date, adjusting the
     amount to be funded by each Revolving Lender, in each case in an amount
     sufficient to achieve such conformity).

          Anything contained in this Agreement to the contrary notwithstanding,
     the Revolving Loans and the Revolving Loan Commitments shall be subject to
     the limitation that in no event shall the Total Utilization of Revolving
     Loan Commitments at any time exceed the Revolving Loan Commitment Amount
     then in effect.

          (iii) Swing Line Loans.

               (a) General Provisions. Swing Line Lender hereby agrees, subject
          to the limitations set forth in the last paragraph of subsection
          2.1A(ii) and set forth below with respect to the maximum amount of
          Swing Line Loans permitted to be outstanding from time to time, to
          make a portion of the Revolving Loan Commitments available to Company
          from time to time during the period from the Closing Date to but
          excluding the Revolving Loan Commitment Termination Date by making
          Swing Line Loans to Company in an aggregate amount not exceeding the
          amount of the Swing Line Loan Commitment to be used for the purposes
          identified in subsection 2.5B, notwithstanding the fact that such
          Swing Line Loans, when aggregated with Swing Line Lender's outstanding
          Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter
          of Credit Usage then in effect, may exceed Swing Line Lender's
          Revolving Loan Commitment. The original amount of the Swing Line Loan
          Commitment is $15,000,000; provided that any reduction of the
          Revolving Loan Commitment Amount made pursuant to subsection 2.4 that
          reduces the Revolving Loan Commitment Amount to an amount less than
          the then current amount of the Swing Line Loan Commitment


                                       38



          shall result in an automatic corresponding reduction of the amount of
          the Swing Line Loan Commitment to the amount of the Revolving Loan
          Commitment Amount, as so reduced, without any further action on the
          part of Company, Administrative Agent or Swing Line Lender. The Swing
          Line Loan Commitment shall expire on the Revolving Loan Commitment
          Termination Date and all Swing Line Loans and all other amounts owed
          hereunder with respect to the Swing Line Loans shall be paid in full
          no later than that date. Amounts borrowed under this subsection
          2.1A(iii) may be repaid and reborrowed to but excluding the Revolving
          Loan Commitment Termination Date.

               (b) Swing Line Loan Prepayment with Proceeds of Revolving Loans.
          With respect to any Swing Line Loans that have not been voluntarily
          prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender
          may, at any time in its sole and absolute discretion, deliver to
          Administrative Agent (with a copy to Company), no later than 1:00 P.M.
          (New York City time) on the first Business Day in advance of the
          proposed Funding Date, a notice requesting Revolving Lenders to make
          Revolving Loans that are Base Rate Loans on such Funding Date in an
          amount equal to the amount of such Swing Line Loans (the "REFUNDED
          SWING LINE LOANS") outstanding on the date such notice is given.
          Company hereby authorizes the giving of any such notice and the making
          of any such Revolving Loans. Anything contained in this Agreement to
          the contrary notwithstanding, (1) the proceeds of such Revolving Loans
          made by Revolving Lenders other than Swing Line Lender shall be
          immediately delivered by Administrative Agent to Swing Line Lender
          (and not to Company) and applied to repay a corresponding portion of
          the Refunded Swing Line Loans and (2) on the day such Revolving Loans
          are made, Swing Line Lender's Pro Rata Share of the Refunded Swing
          Line Loans shall be deemed to be paid with the proceeds of a Revolving
          Loan made by Swing Line Lender, and such portion of the Swing Line
          Loans deemed to be so paid shall no longer be outstanding as Swing
          Line Loans and shall no longer be due under the Swing Line Note, if
          any, of Swing Line Lender but shall instead constitute part of Swing
          Line Lender's outstanding Revolving Loans and shall be due under the
          Revolving Note, if any, of Swing Line Lender. Company hereby
          authorizes Administrative Agent and Swing Line Lender to charge
          Company's accounts with Administrative Agent and Swing Line Lender (up
          to the amount available in each such account) in order to immediately
          pay Swing Line Lender the amount of the Refunded Swing Line Loans to
          the extent the proceeds of such Revolving Loans made by Revolving
          Lenders, including the Revolving Loan deemed to be made by Swing Line
          Lender, are not sufficient to repay in full the Refunded Swing Line
          Loans. If any portion of any such amount paid (or deemed to be paid)
          to Swing Line Lender should be recovered by or on behalf of Company
          from Swing Line Lender in any bankruptcy proceeding, in any assignment
          for the benefit of creditors or otherwise, the loss of the amount so
          recovered shall be ratably shared among all Lenders in the manner
          contemplated by subsection 10.5.


                                       39



               (c) Swing Line Loan Assignments. On the Funding Date of each
          Swing Line Loan, each Revolving Lender shall be deemed to, and hereby
          agrees to, purchase an assignment of such Swing Line Loan in an amount
          equal to its Pro Rata Share. If for any reason (1) Revolving Loans are
          not made upon the request of Swing Line Lender as provided in the
          immediately preceding paragraph in an amount sufficient to repay any
          amounts owed to Swing Line Lender in respect of such Swing Line Loan
          or (2) the Revolving Loan Commitments are terminated at a time when
          such Swing Line Loan is outstanding, upon notice from Swing Line
          Lender as provided below, each Revolving Lender shall fund the
          purchase of such assignment in an amount equal to its Pro Rata Share
          (calculated, in the case of the foregoing clause (2), immediately
          prior to such termination of the Revolving Loan Commitments) of the
          unpaid amount of such Swing Line Loans together with accrued interest
          thereon. Upon one Business Day's notice from Swing Line Lender to
          Administrative Agent who shall promptly notify the Revolving Lenders,
          each Revolving Lender shall deliver to Administrative Agent for the
          benefit of Swing Line Lender such amount in same day funds at the
          Funding and Payment Account. Without limiting the effect of the deemed
          assignment described in the preceding sentence, in order to further
          evidence such assignment (and without prejudice to the effectiveness
          of the assignment provisions set forth above), each Revolving Lender
          agrees to enter into an Assignment Agreement at the request of Swing
          Line Lender in form and substance reasonably satisfactory to Swing
          Line Lender. In the event any Revolving Lender fails to make available
          to Swing Line Lender any amount as provided in this paragraph, Swing
          Line Lender shall be entitled to recover such amount on demand from
          such Revolving Lender together with interest thereon at the rate
          customarily used by Swing Line Lender for the correction of errors
          among banks for three Business Days and thereafter at the Base Rate.
          In the event Swing Line Lender receives a payment of any amount with
          respect to which other Revolving Lenders have funded the purchase of
          assignments as provided in this paragraph, Swing Line Lender shall
          promptly remit such payment to Administrative Agent for distribution
          to each such other Revolving Lender its Pro Rata Share of such
          payment.

               (d) Revolving Lenders' Obligations. Anything contained herein to
          the contrary notwithstanding, each Revolving Lender's obligation to
          make Revolving Loans for the purpose of repaying any Refunded Swing
          Line Loans pursuant to subsection 2.1A(iii)(b) and each Revolving
          Lender's obligation to purchase an assignment of any unpaid Swing Line
          Loans pursuant to the immediately preceding paragraph shall be
          absolute and unconditional and shall not be affected by any
          circumstance, including (1) any set-off, counterclaim, recoupment,
          defense or other right which such Revolving Lender may have against
          Swing Line Lender, Company or any other Person for any reason
          whatsoever; (2) the occurrence or continuation of an Event of Default
          or a Potential Event of Default; (3) any adverse change in the
          business, operations, properties, assets, condition (financial or
          otherwise) or prospects of Company or any of its Subsidiaries; (4) any
          breach of this Agreement or any other Loan Document by any party
          thereto; or (5) any


                                       40



          other circumstance, happening or event whatsoever, whether or not
          similar to any of the foregoing; provided that such obligations of
          each Revolving Lender are subject to the condition that (x) Swing Line
          Lender believed in good faith that all conditions under Section 4 to
          the making of the applicable Refunded Swing Line Loans or other unpaid
          Swing Line Loans, as the case may be, were satisfied at the time such
          Refunded Swing Line Loans or unpaid Swing Line Loans were made or (y)
          the satisfaction of any such condition not satisfied had been waived
          in accordance with subsection 10.6 prior to or at the time such
          Refunded Swing Line Loans or other unpaid Swing Line Loans were made.

          (iv) Increases of the Commitments. Company may, not more than five
     times on or after the Effective Date, increase, in a minimum amount of at
     least $30,000,000, at Company's request, the then effective aggregate
     principal amount of the Revolving Loan Commitments and/or Term Loan
     Commitments; provided that (1) the aggregate principal amount of the
     increases in the Revolving Loan Commitments and/or Term Loan Commitments
     pursuant to this subsection 2.1A(iv) shall not exceed $150,000,000, (2)
     such increases shall be for the purpose of funding Permitted Acquisitions
     or for general corporate purposes, (3) Company shall execute and deliver
     such documents and instruments and take such other actions as may be
     reasonably requested by Administrative Agent in connection with such
     increases and at the time of any such proposed increase, including the
     execution and delivery of any requested Mortgage amendments, (4) no
     Potential Event of Default or Event of Default shall have occurred and be
     continuing or would occur after giving effect to such increase, (5) Company
     and its Subsidiaries shall be in Pro Forma Compliance with each of the
     financial covenants specified in subsection 7.6; (6) (i) the Term Loans
     made under this subsection 2.1A(iv) shall have a maturity date no earlier
     than June 15, 2012 and shall have a weighted average life to maturity no
     shorter than the Term Loans made under subsection 2.1A(i) of the Existing
     First Lien Credit Agreement and (ii) the Revolving Loan Commitments
     provided under this subsection 2.1A(iv) shall expire on the same date as
     the existing Revolving Loan Commitments under subsection 2.1A(ii), (7) if
     the weighted average interest rates applicable to the Term Loans or
     Revolving Loans made pursuant to this subsection 2.1A(iv) exceed the rates
     set forth in subsection 2.2 by more than 25 basis points, then the
     applicable interest rates set forth in subsection 2.2 shall increase by the
     amount necessary to reduce such difference to 25 basis points; (8) all
     other terms and conditions with respect to the Revolving Loan Commitments
     and/or Term Loans provided pursuant to this subsection 2.1A(iv) shall be
     satisfactory to Administrative Agent; and (9) the Revolving Loan
     Commitments (and related Revolving Loans) and Term Loans provided pursuant
     to this subsection 2.1A(iv) shall be permitted indebtedness under the
     Senior Subordinated Note Indenture or the Bridge Facility, as applicable,
     and shall constitute "Senior Indebtedness" (as defined in the Senior
     Subordinated Note Indenture or the definitive documents governing the
     Bridge Facility) for purposes of the Senior Subordinated Note Indenture or
     the Bridge Facility, as applicable. Any request under this subsection
     2.1A(iv) shall be submitted by Company to Administrative Agent (which shall
     promptly forward copies to Lenders). Company may also, but is not required
     to, specify any fees offered to those Lenders (the


                                       41


     "INCREASING LENDERS") which agree to increase the principal amount of their
     Revolving Loan Commitments and/or Term Loan Commitments, which fees may be
     variable based upon the amount by which any such Lender is willing to
     increase the principal amount of its Revolving Loan Commitment and/or Term
     Loan Commitment, as applicable. No Lender shall have any obligation,
     express or implied, to offer to increase the aggregate principal amount of
     its Revolving Loan Commitment and/or Term Loan Commitment. Only the consent
     of each Increasing Lender shall be required for an increase in the
     aggregate principal amount of the Revolving Loan Commitments and/or Term
     Loan Commitments, as applicable, pursuant to this subsection 2.1A(iv). No
     Lender which declines to increase the principal amount of its Revolving
     Loan Commitment and/or Term Loan Commitment may be replaced in respect to
     its existing Revolving Loan Commitment and/or Term Loan Commitment, as
     applicable, as a result thereof without such Lender's consent.

     Each Increasing Lender shall as soon as practicable specify the amount of
     the proposed increase that it is willing to assume. Company may accept some
     or all of the offered amounts or designate new lenders that qualify as
     Eligible Assignees and that are reasonably acceptable to Administrative
     Agent as additional Lenders hereunder in accordance with this subsection
     2.1A(iv) (each such new lender being a "NEW LENDER"), which New Lenders may
     assume all or a portion of the increase in the aggregate principal amount
     of the applicable Revolving Loan Commitments and/or Term Loan Commitments.
     Company and Administrative Agent shall have discretion jointly to adjust
     the allocation of the increased aggregate principal amount of the Revolving
     Loan Commitments and/or Term Loan Commitments among Increasing Lenders and
     New Lenders.

     Subject to the foregoing, any increase requested by Company shall be
     effective upon delivery to Administrative Agent of each of the following
     documents: (i) an originally executed copy of an instrument of joinder
     signed by a duly authorized officer of each New Lender, in form and
     substance reasonably acceptable to Administrative Agent; (ii) a notice to
     the Increasing Lenders and New Lenders, in form and substance reasonably
     acceptable to Administrative Agent, signed by a duly authorized officer of
     Company; (iii) an Officer's Certificate of Company, in form and substance
     reasonably acceptable to Administrative Agent; (iv) to the extent requested
     by any New Lender or Increasing Lender, executed Revolving Notes or Term
     Notes, as applicable, issued by Company in accordance with subsection 2.1E
     hereof; and (v) any other certificates or documents that Administrative
     Agent shall reasonably request, in form and substance reasonably
     satisfactory to Administrative Agent. Any such increase shall be in a
     principal amount equal to (A) the principal amount that Increasing Lenders
     are willing to assume as increases to the principal amount of their
     Revolving Loan Commitments and/or Term Loan Commitments, as applicable plus
     (B) the principal amount offered by New Lenders with respect to the
     Revolving Loan Commitments and/or Term Loan Commitments, in either case as
     adjusted by Company and Administrative Agent pursuant to this subsection
     2.1A(iv). Upon effectiveness of any such increase, the Commitments and Pro
     Rata Share of each Lender will be adjusted to give effect to the increase
     in the Revolving Loan


                                       42



     Commitments and/or Term Loan Commitments, as applicable. Notwithstanding
     anything to the contrary in subsection 10.6, Administrative Agent is
     expressly permitted to amend the Loan Documents to the extent necessary to
     give effect to any increases pursuant to this subsection 2.1A(iv).

     B. BORROWING MECHANICS. Revolving Loans made as Base Rate Loans on any
Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iii) or Revolving Loans made pursuant to
subsection 3.3B) shall be in an aggregate minimum amount of $1,000,000 and
multiples of $500,000 in excess of that amount. Revolving Loans made on any
Funding Date as Eurodollar Rate Loans with a particular Interest Period shall be
in an aggregate minimum amount of $2,000,000 and multiples of $500,000 in excess
of that amount. Swing Line Loans made on any Funding Date shall be in an
aggregate minimum amount of $250,000 and multiples of $100,000 in excess of that
amount. Whenever Company desires that Lenders make Revolving Loans it shall
deliver to Administrative Agent a duly executed Notice of Borrowing no later
than 1:00 P.M. (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Swing Line Lender at the Swing Line Funding and
Payment Office a duly executed Notice of Borrowing no later than 1:00 P.M. (New
York City time) on the proposed Funding Date. Term Loans and Revolving Loans may
be continued as or converted into Base Rate Loans and Eurodollar Rate Loans in
the manner provided in subsection 2.2D. In lieu of delivering a Notice of
Borrowing, Company may give Administrative Agent (or in the case of Swing Line
Loans, Swing Line Lender), as applicable, telephonic notice by the required time
of any proposed borrowing under this subsection 2.1B; provided that such notice
shall be promptly confirmed in writing by delivery of a duly executed Notice of
Borrowing to Administrative Agent (or Swing Line Lender in the case of Swing
Line Loans) on or before the applicable Funding Date.

          Neither Administrative Agent nor any Lender (including Swing Line
Lender) shall incur any liability to Company in acting upon any telephonic
notice referred to above that Administrative Agent (or Swing Line Lender, as
applicable) believes in good faith to have been given by an Officer or other
person authorized to borrow on behalf of Company or for otherwise acting in good
faith under this subsection 2.1B or under subsection 2.2D, and upon funding of
Loans by Lenders, and upon conversion or continuation of the applicable basis
for determining the interest rate with respect to any Loans pursuant to
subsection 2.2D, in each case in accordance with this Agreement, pursuant to any
such telephonic notice Company shall have effected Loans or a conversion or
continuation, as the case may be, hereunder.

          Company shall notify Administrative Agent (or, in the case of Swing
Line Loans, Swing Line Lender) prior to the funding of any Loans in the event
that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.


                                       43



          Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable and Company shall be bound to make a borrowing in
accordance therewith.

     C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that (i) the failure of any
Lender to make its Pro Rata Share of any Loan shall not relieve any other Lender
of its obligations hereunder and (ii) neither Administrative Agent nor any
Lender shall be responsible for any default by any other Lender in that other
Lender's obligation to make a Loan requested hereunder nor shall the amount of
the Commitment of any Lender to make the particular type of Loan requested or
Pro Rata Share of any Lender be increased or decreased as a result of a default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder.

          Promptly after receipt by Administrative Agent of a Notice of
Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender for that type of Loan (other than
Swing Line Lender in the case of a Swing Line Loan borrowing) of the proposed
borrowing. Each such Lender (other than Swing Line Lender) shall make the amount
of its Loan available to Administrative Agent at the Funding and Payment Office
not later than 12:00 Noon (New York City time) on the applicable Funding Date in
same day funds in Dollars, at the Funding and Payment Office. Swing Line Lender
shall make the amount of its Loan directly available to Company as provided
below. Except as provided in subsection 2.1A(iii) or subsection 3.3B with
respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.1 (in the case of Loans made on the Effective Date)
and 4.2 (in the case of all Loans), Administrative Agent or Swing Line Lender,
as the case may be, shall make the proceeds of such Loans available to Company
on the applicable Funding Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders or to be disbursed by Swing Line Lender, as applicable, to be credited
to the account designated by Company in the applicable Notice of Borrowing.

          Unless Administrative Agent shall have been notified by any Lender
prior to a Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to


                                       44



Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.

     D. THE REGISTER. Administrative Agent, acting for these purposes solely as
an agent of Company (it being acknowledged that Administrative Agent, in such
capacity, and its officers, directors, employees, agent and affiliates shall
constitute Indemnitees under subsection 10.3), shall maintain (and make
available for inspection by Company and Lenders upon reasonable prior notice at
reasonable times) at its address referred to in subsection 10.8 a register for
the recordation of, and shall record, the names and addresses of Lenders and the
respective amounts of the Term Loan Commitment, Revolving Loan Commitment, Swing
Line Loan Commitment, Term Loans, Revolving Loans and Swing Line Loans of each
Lender from time to time (the "REGISTER"). Company, Administrative Agent,
Collateral Agent and Lenders shall, absent manifest error, deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof; all
amounts owed with respect to any Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof; and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans. Each Lender shall record on its internal
records the amount of its Loans and Commitments and each payment in respect
hereof, and any such recordation shall be conclusive and binding on Company,
absent manifest error, subject to the entries in the Register, which shall,
absent manifest error, govern in the event of any inconsistency with any
Lender's records. Failure to make any recordation in the Register or in any
Lender's records, or any error in such recordation, shall not affect any Loans
or Commitments or any Obligations in respect of any Loans.

     E. OPTIONAL NOTES. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Effective Date or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection
10.1) on the Effective Date (or, if such notice is delivered after the Effective
Date, promptly after Company's receipt of such notice) a promissory note or
promissory notes to evidence such Lender's Term Loan, Revolving Loans or Swing
Line Loans, substantially in the form of Exhibit IV, Exhibit VI or Exhibit VII
annexed hereto, respectively, with appropriate insertions.

     2.2  INTEREST ON THE LOANS.

     A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and 2.7,
each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Eurodollar Rate. Subject to the provisions of subsection 2.7, each Swing
Line Loan shall bear interest on the unpaid principal amount thereof from the
date


                                       45



made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Term Loan or any Revolving Loan shall
be selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Term Loan
or Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.

          (i) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the
     Term Loans and the Revolving Loans shall bear interest through maturity as
     follows:

               (a) if a Base Rate Loan, then at the sum of the Base Rate plus
          the Applicable Margin for Base Rate Loans; or

               (b) if a Eurodollar Rate Loan, then at the sum of the Eurodollar
          Rate plus the Applicable Margin for Eurodollar Rate Loans.

          (ii) Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the
     Swing Line Loans shall bear interest through maturity at the sum of the
     Base Rate plus the Applicable Margin for Base Rate Loans.

     B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:

          (i) the initial Interest Period for any Eurodollar Rate Loan shall
     commence on the Funding Date in respect of such Loan, in the case of a Loan
     initially made as a Eurodollar Rate Loan, or on the date specified in the
     applicable Notice of Conversion/Continuation, in the case of a Loan
     converted to a Eurodollar Rate Loan;

          (ii) in the case of immediately successive Interest Periods applicable
     to a Eurodollar Rate Loan continued as such pursuant to a Notice of
     Conversion/Continuation, each successive Interest Period shall commence on
     the day on which the next preceding Interest Period expires;

          (iii) if an Interest Period would otherwise expire on a day that is
     not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day; provided that, if any Interest Period would
     otherwise expire on a day that is not a Business Day but is a day of the
     month after which no further Business Day occurs in such month, such
     Interest Period shall expire on the next preceding Business Day;


                                       46



          (iv) any Interest Period that begins on the last Business Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the calendar month at the end of such Interest Period) shall,
     subject to clause (v) of this subsection 2.2B, end on the last Business Day
     of a calendar month;

          (v) no Interest Period with respect to any portion of the Term Loans
     shall extend beyond the Term Loan Maturity Date, and no Interest Period
     with respect to any portion of the Revolving Loans shall extend beyond the
     Revolving Loan Commitment Termination Date;

          (vi) no Interest Period with respect to any type of Term Loans shall
     extend beyond a date on which Company is required to make a scheduled
     payment of principal of such type of Term Loans, unless the sum of (a) the
     aggregate principal amount of such type of Term Loans that are Base Rate
     Loans plus (b) the aggregate principal amount of such type of Term Loans
     that are Eurodollar Rate Loans with Interest Periods expiring on or before
     such date equals or exceeds the principal amount required to be paid on
     such type of Term Loans on such date;

          (vii) there shall be no more than ten Interest Periods outstanding at
     any time; and

          (viii) in the event Company fails to specify an Interest Period for
     any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
     Conversion/Continuation, Company shall be deemed to have selected an
     Interest Period of one month.

     C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that, in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Loans through the date of such prepayment shall be
payable on the next succeeding Interest Payment Date applicable to Base Rate
Loans (or, if earlier, at final maturity).

     D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection 2.6,
Company shall have the option (i) to convert at any time all or any part of its
outstanding Term Loans or Revolving Loans that are Base Rate Loans to Eurodollar
Rate Loans in amounts equal to $2,000,000 and multiples of $500,000 in excess of
that amount or (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$2,000,000 and multiples of $500,000 in excess of that amount as a Eurodollar
Rate Loan or convert all or any portion of such Loan equal to $1,000,000 and
multiples of $500,000 in excess of that amount to a Base Rate Loan; provided,
however, that a Eurodollar Rate Loan may only be converted into a Base Rate Loan
on the expiration date of an Interest Period applicable thereto.

          Company shall deliver a duly executed Notice of
Conversion/Continuation to Administrative Agent no later than 1:00 P.M. (New
York City time) at least one Business Day in


                                       47



advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Conversion/Continuation to
Administrative Agent on or before the proposed conversion/continuation date.
Administrative Agent shall notify each Lender of any Loan subject to a Notice of
Conversion/Continuation.

          Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
and Company shall be bound to effect a conversion or continuation in accordance
therewith.

     E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand by Administrative Agent at a rate that is 2% per annum in excess of the
interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans); provided that, in the case of Eurodollar
Rate Loans, upon the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand by Administrative Agent at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.

     F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i) in
the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.


                                       48



     G. MAXIMUM RATE. Notwithstanding the foregoing provisions of this
subsection 2.2, in no event shall the rate of interest payable by Company with
respect to any Loan exceed the maximum rate of interest permitted to be charged
under applicable law.

     H. TERM LOAN REPRICING PROTECTION. In the event that, prior to the first
anniversary of the Effective Date, any Lender with Term Loan Exposure receives a
Repricing Prepayment (as defined below), then, at the time thereof, Company
shall pay to such Lender a prepayment premium equal to 1.00% of the amount of
such Repricing Prepayment. As used herein, with respect to any Lender with Term
Loan Exposure, a "REPRICING PREPAYMENT" is the amount of principal of the Term
Loans of such Lender that is either (a) prepaid by Company substantially
concurrently with the incurrence by Holdings or any of its Subsidiaries of new
term loans under this Agreement (or pursuant to any amendment, amendment and
restatement or other modification of this Agreement) or under any new agreement
that refinances any Term Loans, in either case, that have an interest rate
margin lower than the interest rate margin then in effect for the Term Loans so
prepaid or (b) received by such Lender as a result of the mandatory assignment
of such Term Loans in the circumstances described in subsection 2.9 following
the failure of such Lender to consent to an amendment of this Agreement that
would have the effect of reducing the interest rate margin applicable to such
Term Loans; provided however that such Repricing Prepayment shall not include
any prepayment made in connection with a Change in Control resulting in (i) the
repayment of all of the principal and interest due on Loans under this
Agreement, (ii) the termination of all of the Revolving Loan Commitments under
this Agreement and (iii) the payment of all other obligations due and owing
under the Loan Documents.

     2.3  FEES.

     A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the date the Revolving Loan Commitments are terminated under this
Agreement equal to the average of the daily excess of the Revolving Loan
Commitment Amount over the sum of (i) the aggregate principal amount of
outstanding Revolving Loans (but not any outstanding Swing Line Loans) plus (ii)
the Letter of Credit Usage multiplied by a rate per annum equal to the
percentage set forth in the table below opposite the Consolidated Leverage Ratio
for the four Fiscal Quarter period for which the applicable Pricing Certificate
has been delivered pursuant to subsection 6.1(v):



          Consolidated              Commitment
         Leverage Ratio           Fee Percentage
         --------------           --------------
                               
     greater than 2.50:1.00            0.50%
equal to or less than 2.50:1.00       0.375%



                                       49



such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on the last
Business Day of March, June, September and December of each year, commencing on
September 30, 2005, and on the date the Revolving Loan Commitments are
terminated under this Agreement; provided that until the delivery of financial
statements pursuant to subsection 6.1(iv) and a Pricing Certificate pursuant to
subsection 6.1(v), in each case covering the fiscal period ending on December
31, 2005, the applicable commitment fee percentage shall be 0.50% per annum.
Upon delivery of each Pricing Certificate by Company to Administrative Agent
pursuant to subsection 6.1(v) covering any fiscal period ending after December
31, 2005, the applicable commitment fee percentage shall automatically be
adjusted in accordance with such Pricing Certificate, such adjustment to become
effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Pricing Certificate; provided that if at any time a
Pricing Certificate is not delivered at the time required pursuant to subsection
6.1(v), from the time such Pricing Certificate was required to be delivered
until delivery of such Pricing Certificate, the applicable commitment fee
percentage shall be the maximum percentage amount set forth above.

     B. OTHER FEES. Company agrees to pay to Administrative Agent such fees in
the amounts and at the times separately agreed upon.

     2.4  REPAYMENTS, PREPAYMENTS AND REDUCTIONS OF REVOLVING LOAN COMMITMENT
          AMOUNT; GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS
          OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY GUARANTY.

     A. SCHEDULED PAYMENTS OF TERM LOANS.

          (i) Scheduled Payments of Term Loans. Company shall make principal
     payments on the Term Loans in installments on the dates and in the amounts
     set forth below:



                       Scheduled
       Date            Repayment
       ----          ------------
                  
December 31, 2005    $    650,000
March 31, 2006       $    650,000
June 30, 2006        $    650,000
September 30, 2006   $    650,000
December 31, 2006    $    650,000
March 31, 2007       $    650,000
June 30, 2007        $    650,000
September 30, 2007   $    650,000
December 31, 2007    $    650,000
March 31, 2008       $    650,000
June 30, 2008        $    650,000
September 30, 2008   $    650,000



                                       50





                       Scheduled
       Date            Repayment
       ----          ------------
                  
December 31, 2008    $    650,000
March 31, 2009       $    650,000
June 30, 2009        $    650,000
September 30, 2009   $    650,000
December 31, 2009    $    650,000
March 31, 2010       $    650,000
June 30, 2010        $    650,000
September 30, 2010   $    650,000
December 31, 2010    $    650,000
March 31, 2011       $    650,000
June 30, 2011        $    650,000
September 30, 2011   $    650,000
December 31, 2011    $    650,000
March 31, 2012       $    650,000
June 15, 2012        $242,450,000


     ; provided that the scheduled installments of principal of the Term Loans
     set forth above shall be reduced in connection with any voluntary or
     mandatory prepayments of the Term Loans in accordance with subsection
     2.4B(iv); and provided, further that the Term Loans and all other amounts
     owed hereunder with respect to the Term Loans shall be paid in full no
     later than the Term Loan Maturity Date, and the final installment payable
     by Company in respect of the Term Loans on such date shall be in an amount,
     if such amount is different from that specified above, sufficient to repay
     all amounts owing by Company under this Agreement with respect to the Term
     Loans.

     B. PREPAYMENTS OF LOANS AND REDUCTIONS IN REVOLVING LOAN COMMITMENT AMOUNT.

          (i) Voluntary Prepayments. Company may, upon written or telephonic
     notice to Administrative Agent on or prior to 1:00 P.M. (New York City
     time) on the date of prepayment, which notice, if telephonic, shall be
     promptly confirmed in writing, at any time and from time to time, prepay
     any Swing Line Loan on any Business Day in whole or in part in an aggregate
     minimum amount of $250,000 and multiples of $100,000 in excess of that
     amount. Company may, upon not less than one Business Day's prior written or
     telephonic notice, in the case of Base Rate Loans, and three Business Days'
     prior written or telephonic notice, in the case of Eurodollar Rate Loans,
     in each case given to Administrative Agent by 1:00 P.M. (New York City
     time) on the date required and, if given by telephone, promptly confirmed
     in writing to Administrative Agent, who will promptly notify each Lender
     whose Loans are to be prepaid of such prepayment, at


                                       51



     any time and from time to time prepay any Term Loans or Revolving Loans on
     any Business Day in whole or in part in an aggregate minimum amount of
     $1,000,000 and multiples of $500,000 in excess of that amount; provided,
     however, that a Eurodollar Rate Loan may only be prepaid on the expiration
     of the Interest Period applicable thereto unless Company compensates
     Lenders for all breakage costs resulting from such payment or conversion
     pursuant to subsection 2.6D. All written notices delivered pursuant to this
     subsection 2.4B(i) shall be in the form of a Notice of Prepayment and all
     notices whether written or telephonic delivered pursuant to this subsection
     2.4B(i) shall be irrevocable, and once given as aforesaid, the principal
     amount of the Loans specified in such notice shall become due and payable
     on the prepayment date specified therein; provided that in connection with
     the termination of all commitments under this Agreement and the repayment
     in full of all Obligations under this Agreement (including the cash
     collateralization of all Letters of Credit in an amount equal to 105% of
     the maximum amount which may be drawn thereunder), such repayment may be
     made conditional on the closing of the transaction from which the funds
     required for such repayment are to be received. Any such voluntary
     prepayment shall be applied as specified in subsection 2.4B(iv).

          (ii) Voluntary Reductions of Revolving Loan Commitments. Company may,
     upon not less than three Business Days' prior written or telephonic notice
     confirmed in writing to Administrative Agent, or upon such lesser number of
     days' prior written or telephonic notice, as determined by Administrative
     Agent in its sole discretion, at any time and from time to time, terminate
     in whole or permanently reduce in part, without premium or penalty, the
     Revolving Loan Commitment Amount in an amount up to the amount by which the
     Revolving Loan Commitment Amount exceeds the Total Utilization of Revolving
     Loan Commitments at the time of such proposed termination or reduction;
     provided that any such partial reduction of the Revolving Loan Commitment
     Amount shall be in an aggregate minimum amount of $1,000,000 and multiples
     of $500,000 in excess of that amount. The Notice of Prepayment shall
     designate the date (which shall be a Business Day) of such termination or
     reduction and the amount of any partial reduction, and such termination or
     reduction shall be effective on the date specified in Company's notice and
     shall reduce the amount of the Revolving Loan Commitment of each Revolving
     Lender proportionately to its Pro Rata Share. Administrative Agent will
     promptly notify each Revolving Lender of such notice. Any such voluntary
     reduction of the Revolving Loan Commitment Amount shall be applied as
     specified in subsection 2.4B(iv). All written notices delivered pursuant to
     this subsection 2.4B(ii) shall be in the form of a Notice of Prepayment,
     all notices, whether written or telephonic, delivered pursuant to this
     subsection 2.4B(ii) shall be irrevocable and Company shall be bound to the
     termination or reduction of the Revolving Loan Commitments referenced in
     such notice; provided that in connection with the termination of all
     commitments under this Agreement and the repayment in full of all
     Obligations under this Agreement (including the cash collateralization of
     all Letters of Credit in an amount equal to 105% of the maximum amount
     which may be drawn thereunder), any related termination may be made
     conditional on the closing of the transaction from which the funds required
     for such repayment are to be received.


                                       52



          (iii) Mandatory Prepayments. The Term Loans shall be prepaid and
     (subject to subsection 2.4B(iv)(b)), after the Term Loans have been paid in
     full, Revolving Loans shall be prepaid (but without a reduction of the
     Revolving Loan Commitments) and, after all Revolving Loans have been paid,
     outstanding Letters of Credit shall be Cash collateralized in an amount
     equal to 105% of the maximum amount which may be drawn thereunder, in each
     case in the amounts and under the circumstances (including the giving of
     the Notice of Prepayment and Officer's Certificate required by subsection
     2.4B(iii)(g)), set forth below, all such prepayments to be applied as set
     forth below or as more specifically provided in subsection 2.4B(iv) and
     subsection 2.4D:

               (a) Prepayments and Reductions From Net Asset Sale Proceeds. No
          later than the tenth Business Day following the date of receipt by
          Company or any of its Subsidiaries of any Net Asset Sale Proceeds in
          respect of any Asset Sale, Company shall either (1) prepay the Term
          Loans in an aggregate amount equal to such Net Asset Sale Proceeds
          (provided that Company may defer making any such prepayment until the
          cumulative amount of such Net Asset Sale Proceeds to be applied to the
          prepayment of the Term Loans exceeds $1,500,000) or (2) so long as no
          Potential Event of Default or Event of Default shall have occurred and
          be continuing, deliver to Administrative Agent an Officer's
          Certificate setting forth that portion of such Net Asset Sale Proceeds
          that Company or such Subsidiary intends to reinvest in equipment or
          other productive assets of the general type used in the business of
          Company and its Subsidiaries or in connection with Permitted
          Acquisitions within 270 days of such date of receipt, and Company
          shall, or shall cause one or more of its Subsidiaries to, promptly and
          diligently apply such portion to such reinvestment purposes; provided,
          however, that, pending such reinvestment, such portion of the Net
          Asset Sale Proceeds may be applied to prepay outstanding Revolving
          Loans (without a reduction in the Revolving Loan Commitment Amount) to
          the full extent thereof. In addition, to the extent that such Net
          Asset Sale Proceeds have not theretofore been applied to the
          Obligations or that have not been so reinvested as provided above,
          Company shall make an additional prepayment of the Term Loans in an
          amount equal to such unapplied Net Asset Sale Proceeds.

               (b) Prepayments and Reductions from Net Insurance/Condemnation
          Proceeds. No later than the tenth Business Day following the date of
          receipt by Administrative Agent or by Company or any of its
          Subsidiaries of any Net Insurance/Condemnation Proceeds that are
          required to be applied to prepay the Term Loans pursuant to the
          provisions of subsection 6.4C, Company shall either (1) prepay the
          Term Loans in an aggregate amount equal to such Net
          Insurance/Condemnation Proceeds (provided that Company may defer
          making any such prepayment until the cumulative amount of such Net
          Insurance/Condemnation Proceeds to be applied to the prepayment of the
          Term Loans exceeds $1,500,000) or (2) so long as no Potential Event of
          Default or Event of Default shall have occurred and be continuing,
          deliver to Administrative Agent an Officer's Certificate setting forth
          that portion of such Net


                                       53



          Insurance/Condemnation Proceeds that Company or such Subsidiary
          intends to reinvest in equipment or other productive assets of the
          general type used in the business of Company and its Subsidiaries or
          in connection with Permitted Acquisitions within 270 days of such date
          of receipt, and Company shall, or shall cause one or more of its
          Subsidiaries to, promptly and diligently apply such portion to such
          reinvestment purpose; provided, however, that, pending such portion of
          the Net Insurance/Condemnation Proceeds may be applied to prepay
          outstanding Revolving Loans (without a reduction in the Revolving Loan
          Commitment Amount) to the full extent thereof. In addition, to the
          extent that such Net Insurance/Condemnation Proceeds have not
          theretofore been applied to the Obligation or that have not been so
          reinvested as provided above, Company shall make an additional
          prepayment of the Term Loans in an amount equal to such unapplied Net
          Insurance/Condemnation Proceeds.

               (c) Prepayments and Reductions Due to Issuance of Equity
          Securities. No later than the tenth Business Day following the date of
          receipt of the Net Securities Proceeds from the issuance of any Equity
          Interests of Holdings or any of its Subsidiaries or from any capital
          contribution to Holdings or Company by any holder of Equity Interests
          thereof after the Closing Date, Company shall prepay the Term Loans in
          an aggregate amount equal to 50% of such Net Securities Proceeds other
          than (A) Net Securities Proceeds applied to repay the Bridge Facility,
          if any, or (B) Net Securities Proceeds resulting from the issuance of
          any Equity Securities of (i) Holdings to officers, directors and
          employees pursuant to any stock option plan or other similar incentive
          or compensation plans approved by Company's Board of Directors, (ii)
          any Subsidiary of Company to Company or any Subsidiary of Company,
          (iii) Holdings in connection with the Transactions or (iv) Holdings in
          connection with any capital contributions by any Permitted Holder of
          Equity Interests of Holdings (but not including an initial public
          offering); provided that to the extent the Consolidated Leverage Ratio
          as of the last day of the Fiscal Quarter immediately preceding the
          date on which any Net Securities Proceeds are received is less than
          3.00:1.00, the percentage of such Net Securities Proceeds required to
          be used to prepay the Term Loans pursuant to this subsection
          2.4B(iii)(c) shall be 25%.

               (d) Prepayments and Reductions Due to Issuance of Indebtedness.
          No later than the tenth Business Day following the date of receipt of
          the Net Securities Proceeds from the issuance of any Indebtedness of
          Company, Holdings or any of its Subsidiaries after the Closing Date,
          other than Indebtedness permitted pursuant to subsection 7.1, Company
          shall prepay the Term Loans in an aggregate amount equal to such Net
          Securities Proceeds.

               (e) Prepayments and Reductions from Consolidated Excess Cash
          Flow. In the event that there shall be Consolidated Excess Cash Flow
          for any Fiscal Year (commencing with the Fiscal Year ended December
          31, 2006), Company shall, no later than 95 days after the end of such
          Fiscal Year, prepay the Term Loans in an aggregate amount equal to 50%
          of such Consolidated Excess


                                       54



          Cash Flow; provided that for any Fiscal Year in which the Consolidated
          Leverage Ratio as of the last day of such Fiscal Year is less than
          3.00:1.00 the percentage of Consolidated Excess Cash Flow required to
          be used to prepay the Term Loans pursuant to this subsection
          2.4B(iii)(e) shall be 25%.

               (f) Prepayment With Excess Acquisition Reserve Amounts. No later
          than the fifth Business Day following the earlier of (i) the date on
          which the acquisition permitted pursuant to subsection 7.3(xiii) is
          consummated and (ii) March 31, 2006, Company shall prepay the Term
          Loans in an aggregate amount equal to the amount of the excess, if
          any, of the Acquisition Reserve Amount over the actual amount of
          consideration paid and other expenses incurred by Company or any of
          its Subsidiaries in connection with Permitted Acquisitions consummated
          after the Effective Date but on or prior to March 31, 2006.

               (g) Calculations of Net Proceeds Amounts; Additional Prepayments
          and Reductions Based on Subsequent Calculations. Company shall provide
          Administrative Agent with not less than ten (or five in the case of a
          prepayment pursuant to subsection 2.4B(iii)(f)) Business Days' prior
          written notice by delivery of a Notice of Prepayment or prior
          telephonic notice promptly confirmed in writing by the delivery of a
          Notice of Prepayment, of any prepayment of the Term Loans pursuant to
          subsections 2.4B(iii)(a)-(f). Such written or telephonic notice shall
          be irrevocable and Company shall be bound to make the mandatory
          prepayment referenced in such notice on the date indicated in such
          notice. Administrative Agent shall promptly notify each Lender of such
          prepayment and of the amount of the prepayment proposed to be applied
          to such Lender's Term Loans. Concurrently with any prepayment of the
          Term Loans pursuant to subsections 2.4B(iii)(a)-(f), Company shall
          deliver to Administrative Agent an Officer's Certificate demonstrating
          the calculation of the amount of the applicable Net Asset Sale
          Proceeds, Net Insurance/Condemnation Proceeds, Net Securities
          Proceeds, Consolidated Excess Cash Flow or excess acquisition funds,
          as the case may be, that gave rise to such prepayment. In the event
          that Company shall subsequently determine that the actual amount was
          greater than the amount set forth in such Officer's Certificate,
          Company shall promptly make an additional prepayment of the Term Loans
          in an amount equal to the amount of such excess, and Company shall
          concurrently therewith deliver to Administrative Agent an Officer's
          Certificate demonstrating the derivation of the additional amount
          resulting in such excess.

               (h) Prepayments Due to Reductions of Revolving Loan Commitment
          Amount. Company shall from time to time prepay first the Swing Line
          Loans and second the Revolving Loans (and, after prepaying all
          Revolving Loans, Cash collateralize any outstanding Letters of Credit
          by depositing the requisite amount in the Collateral Account) to the
          extent necessary so that the Total Utilization of Revolving Loan
          Commitments shall not at any time exceed the Revolving Loan Commitment
          Amount then in effect. At such time as the Total Utilization of
          Revolving Loan Commitments shall be equal to or less than the
          Revolving Loan


                                       55



          Commitment Amount, if no Event of Default has occurred and is
          continuing, to the extent any Cash collateral was provided by Company
          and has not been applied to any Obligations as provided in the
          Security Agreement, such amount may, at the request of Company, be
          released to Company.

          (iv) Application of Prepayments.

               (a) Application of Voluntary Prepayments by Type of Loans and
          Order of Maturity. Any voluntary prepayments pursuant to subsection
          2.4B(i) shall be applied as specified by Company in the applicable
          Notice of Prepayment; provided that all such voluntary prepayments
          shall, irrespective of any application specified by Company, first be
          applied in the following priority to repay any amounts owing to (i)
          first, Swing Line Lender due to the failure of any Revolving Lender to
          (A) fund a Revolving Loan for the purpose of repaying any Refunded
          Swing Line Loan pursuant to subsection 2.1A(iii)(b) or (B) purchase an
          assignment of an unpaid Swing Line Loan pursuant to subsection
          2.1A(iii)(c), and (ii) second, Issuing Lenders due to the failure of
          any Revolving Lender to (A) fund a Revolving Loan for the purpose of
          repaying any unreimbursed amounts of a drawing under a Letter of
          Credit pursuant to subsection 3.3B or (B) fund a participation in any
          such unreimbursed Letter of Credit drawing pursuant to subsection
          3.3C; provided further that in the event Company fails to specify the
          Loans to which any such prepayment shall be applied, such prepayment
          shall be applied first to repay outstanding Swing Line Loans to the
          full extent thereof, second to repay outstanding Revolving Loans to
          the full extent thereof, and third to repay outstanding Term Loans to
          the full extent thereof. Any voluntary prepayments of the Term Loans
          pursuant to subsection 2.4B(i) shall be applied to reduce the
          scheduled installments of principal of the Term Loans as specified by
          Company in the applicable Notice of Prepayment and if no application
          is specified, such voluntary prepayment shall be applied to reduce the
          scheduled installments of principal of the Term Loans set forth in
          subsection 2.4A(i) on a pro rata basis (in accordance with the
          respective outstanding principal amounts thereof) to each remaining
          scheduled installment of principal of the Term Loans set forth in
          subsection 2.4A(i).

               (b) Application of Mandatory Prepayments of Term Loans to the
          Scheduled Installments of Principal Thereof and to Revolving Loans and
          Cash Collateralization of Letters of Credit.

                    (1) Except as provided in subsection 2.4D, any mandatory
               prepayments of the Term Loans pursuant to subsections
               2.4B(iii)(a)-(f) shall be applied to reduce the scheduled
               installments of principal of the Term Loans set forth in
               subsection 2.4A(i) as follows: (i) first in direct order of
               maturity against installments of principal due set forth in
               subsection 2.1A(i) within 12 months after the date of any such
               prepayment and (ii) thereafter on a pro rata basis (in accordance
               with the respective outstanding principal amounts thereof) to
               each scheduled installment of


                                       56



               principal of the Term Loans set forth in subsection 2.4A(i) that
               remains unpaid. Notwithstanding the foregoing, in the case of any
               mandatory prepayment of the Term Loans, Lenders of the Term Loans
               may waive the right to receive the amount of such mandatory
               prepayment by providing written notice to Administrative Agent of
               such waiver by 2:00 P.M. (New York City time) at least eight (or
               three in the case of a prepayment pursuant to subsection
               2.4B(iii)(f)) Business Days prior to the date such mandatory
               prepayment is to be made. If any Lender or Lenders elect to waive
               the right to receive the amount of such mandatory prepayment all
               of the amount that otherwise would have been applied to
               mandatorily prepay the Term Loans of such Lender or Lenders shall
               be offered on a pro rata basis to each Lender that initially
               accepted such mandatory prepayment and such Lenders shall have
               the right to waive such additional mandatory prepayment offer by
               providing written notice to Administrative Agent of such waiver
               by 2:00 P.M. (New York City time) at least six (or two in the
               case of a prepayment pursuant to subsection 2.4B(iii)(f))
               Business Days prior to the date such mandatory prepayment is to
               be made. If any Lender or Lenders that are offered such
               additional mandatory prepayment elect to waive the right to
               receive the amount of such additional mandatory prepayment, all
               of the amount that otherwise would have been applied to
               mandatorily prepay the Term Loans of such Lender or Lenders may
               be retained by Company.

                    (2) Notwithstanding the provisions in subsection 2.4B, after
               the Term Loans have been repaid in full, all mandatory
               prepayments (or the excess portion thereof if the Terms Loans are
               repaid in full in connection with a mandatory prepayment) shall
               be applied first to repay outstanding Revolving Loans to the full
               extent thereof (but without a reduction of the Revolving Loan
               Commitments), and second to Cash collateralize any outstanding
               Letters of Credit by depositing an amount equal to 105% of the
               maximum amount which may be drawn thereunder in the Collateral
               Account and amounts not applied in accordance with the foregoing
               may be retained by Company.

               (c) Application of Prepayments to Base Rate Loans and Eurodollar
          Rate Loans. In connection with any voluntary prepayments by Company
          pursuant to subsection 2.4B(i) and considering Term Loans and
          Revolving Loans being prepaid separately, any voluntary prepayment
          thereof shall be applied first to Base Rate Loans to the full extent
          thereof before application to Eurodollar Rate Loans, in each case in a
          manner that minimizes the amount of any payments required to be made
          by Company pursuant to subsection 2.6D. In connection with any
          mandatory prepayments by Company of the Term Loans pursuant to
          subsections 2.4B(iii)(a)-(f), such prepayments shall be applied on a
          pro rata basis to the then outstanding Term Loans being prepaid
          irrespective of whether such outstanding Term Loans are Base Rate
          Loans or Eurodollar Rate Loans; provided that if no


                                       57



          Lenders exercise the right to waive a given mandatory prepayment of
          the Term Loans pursuant to subsection 2.4B(iv)(b), then, with respect
          to such mandatory prepayment, the amount of such mandatory prepayment
          shall be applied first to Term Loans that are Base Rate Loans to the
          full extent thereof before application to Term Loans that are
          Eurodollar Rate Loans in a manner that minimizes the amount of any
          payments required to be made by Company pursuant to subsection 2.6D.

     C. GENERAL PROVISIONS REGARDING PAYMENTS.

          (i) Manner and Time of Payment. All payments by Company of principal,
     interest, fees and other Obligations shall be made in Dollars in same day
     funds, without defense, setoff or counterclaim, free of any restriction or
     condition, and delivered to Administrative Agent not later than 1:00 P.M.
     (New York City time) on the date due at the Funding and Payment Account for
     the account of Lenders; funds received by Administrative Agent after that
     time on such due date shall be deemed to have been paid by Company on the
     next succeeding Business Day at Administrative Agent's sole discretion.
     Company hereby authorizes Administrative Agent to charge its accounts with
     Administrative Agent in order to cause timely payment to be made to
     Administrative Agent of all principal, interest, fees and expenses due
     hereunder (subject to sufficient funds being available in its accounts for
     that purpose).

          (ii) Application of Payments to Principal and Interest. Except as
     provided in subsection 2.2C, all payments in respect of the principal
     amount of any Loan shall include payment of accrued interest on the
     principal amount being repaid or prepaid, and all such payments shall be
     applied to the payment of interest before application to principal.

          (iii) Apportionment of Payments. Aggregate principal and interest
     payments in respect of Term Loans and Revolving Loans shall be apportioned
     among all outstanding Loans to which such payments relate, in each case
     proportionately to Lenders' respective Pro Rata Shares; provided, that all
     payments in respect of Revolving Loans shall first be applied in the
     following priority to repay any amounts owing to (i) first, Swing Line
     Lender due to the failure of any Revolving Lender to (A) fund a Revolving
     Loan for the purpose of repaying any Refunded Swing Line Loan pursuant to
     subsection 2.1A(iii)(b) or (B) purchase an assignment of an unpaid Swing
     Line Loan pursuant to subsection 2.1A(iii)(c), and (ii) second, Issuing
     Lenders due to the failure of any Revolving Lender to (A) fund a Revolving
     Loan for the purpose of repaying any unreimbursed amounts of a drawing
     under a Letter of Credit pursuant to subsection 3.3B or (B) fund a
     participation in any such unreimbursed Letter of Credit drawing pursuant to
     subsection 3.3C; provided further that any payments on the Revolving Loans
     remaining after the application of the foregoing proviso shall be allocated
     to each Revolving Lender, excluding Defaulting Revolving Lenders, in an
     amount equal to each such Revolving Lender's Pro Rata Share of the
     aggregate payments on the Revolving Loans prior to the application of the
     foregoing proviso and each Defaulting Revolving Lender shall be entitled to
     receive its Pro Rata Share of any such payments less the amount applied in


                                       58



     accordance with the forgoing proviso attributable to such Defaulting
     Revolving Lender. Administrative Agent shall promptly distribute to each
     Lender, at the account specified in the payment instructions delivered to
     Administrative Agent by such Lender, its Pro Rata Share of all such
     payments received by Administrative Agent and the commitment fees and
     letter of credit fees of such Lender, if any, when received by
     Administrative Agent pursuant to subsections 2.3 and 3.2. Notwithstanding
     the foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
     provisions of subsection 2.6C, any Notice of Conversion/Continuation is
     withdrawn as to any Affected Lender or if any Affected Lender makes Base
     Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans,
     Administrative Agent shall give effect thereto in apportioning interest
     payments received thereafter.

          (iv) Payments on Business Days. Whenever any payment to be made
     hereunder shall be stated to be due on a day that is not a Business Day,
     such payment shall be made on the next preceding Business Day.

          (v) Notation of Payment. Each Lender agrees that, before disposing of
     any Note held by it, or any part thereof (other than by granting
     participations therein), Lender will make a notation thereon of all Loans
     evidenced by that Note and all principal payments previously made thereon
     and of the date to which interest thereon has been paid; provided that the
     failure to make (or any error in the making of) a notation of any Loan made
     under such Note shall not limit or otherwise affect the obligations of
     Company hereunder or under such Note with respect to any Loan or any
     payments of principal or interest on such Note.

     D. APPLICATION OF PROCEEDS OF COLLATERAL. (a) Upon acceleration of the
Obligations pursuant to Section 8, all payments received by Administrative Agent
or Collateral Agent, whether from Company, Holdings or any Subsidiary Guarantor
or otherwise, and (b) all proceeds received by Administrative Agent or
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any Collateral Document
shall be applied in full or in part by Administrative Agent, in the following
order of priority:

          (i) to the payment of all costs and expenses of such sale, collection
     or other realization, all other expenses, liabilities and advances made or
     incurred by Administrative Agent or Collateral Agent in connection
     therewith, and all amounts for which Administrative Agent or Collateral
     Agent is entitled to compensation (including the fees described in
     subsection 2.3), reimbursement and indemnification under any Loan Document
     and all advances made by Administrative Agent or Collateral Agent
     thereunder for the account of the applicable Loan Party, and to the payment
     of all costs and expenses paid or incurred by Administrative Agent or
     Collateral Agent in connection with the Loan Documents, all in accordance
     with subsections 9.4, 10.2 and 10.3 and the other terms of this Agreement
     and the Loan Documents;

          (ii) thereafter, to the payment of all other Obligations (including
     the cash collateralization of any outstanding Letters of Credit in an
     amount equal to 105% of the maximum amount that may be drawn under such
     Letters of Credit) and obligations of


                                       59



     Loan Parties under any Hedge Agreement between a Loan Party and a Swap
     Counterparty then owing for the ratable benefit of the holders thereof; and

          (iii) thereafter, to the payment to or upon the order of such Loan
     Party or to whosoever may be lawfully entitled to receive the same or as a
     court of competent jurisdiction may direct.

     2.5  USE OF PROCEEDS.

     A. TERM LOANS. The proceeds of the Term Loans were applied by Company to
fund the refinancing of certain indebtedness of Company, redemption of the
Series A Preferred Stock of Company (as defined in the Existing First Lien
Credit Agreement) and payment of a dividend to the holders of capital stock of
Company and to pay certain transaction costs.

     B. REVOLVING LOANS; SWING LINE LOANS. The proceeds of any Revolving Loans
and any Swing Line Loans shall be applied by Company for working capital and
other general corporate purposes, which may include the making of intercompany
loans to any of Company's wholly-owned Subsidiaries, in accordance with
subsection 7.1(iv), for their own general corporate purposes.

     C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.

     2.6  SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

          Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:

     A. DETERMINATION OF APPLICABLE INTEREST RATE. On each Interest Rate
Determination Date, Administrative Agent shall determine in accordance with the
terms of this Agreement (which determination shall, absent manifest error, be
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Company and each applicable
Lender.

     B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by


                                       60



telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be for a Base Rate Loan.

     C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result
of compliance by such Lender in good faith with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially and
adversely affect the London interbank market or the position of such Lender in
that market, then, and in any such event, such Lender shall be an "AFFECTED
LENDER" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination.
Administrative Agent shall promptly notify each other Lender of the receipt of
such notice. Thereafter (a) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above. Administrative Agent shall promptly
notify each other Lender of the receipt of such notice. Except as provided in
the immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the
terms of this Agreement.

     D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender
pursuant to


                                       61


subsection 2.8, for all reasonable losses, expenses and liabilities (including
any interest paid by that Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained by
that Lender in connection with the liquidation or re-employment of such funds)
which that Lender may sustain: (i) if for any reason (other than a default by
that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request therefor, or
a conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request therefor, (ii) if any prepayment or other principal payment or any
conversion of any of its Eurodollar Rate Loans (including any prepayment or
conversion occasioned by the circumstances described in subsection 2.6C) occurs
on a date prior to the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any
date specified in a Notice of Prepayment given by Company, or (iv) as a
consequence of any other default by Company in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.

     E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or
the office of an Affiliate of that Lender.

     F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had funded each of its Eurodollar Rate
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period, whether or not its Eurodollar Rate
Loans had been funded in such manner.

     G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have a Loan be made or maintained as, or converted to,
a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be for a Base Rate Loan or, if the conditions to
making a Loan set forth in subsection 4.2 cannot then be satisfied, to be
rescinded by Company.

     2.7  INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

     A. COMPENSATION FOR INCREASED COSTS. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender (including any Issuing Lender) shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such


                                       62



Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other Government Authority (whether or not having
the force of law):

          (i) subjects such Lender to any additional Tax with respect to this
     Agreement or any of its obligations hereunder (including with respect to
     issuing or maintaining any Letters of Credit or purchasing or maintaining
     any participations therein or maintaining any Commitment hereunder) or any
     payments to such Lender of principal, interest, fees or any other amount
     payable hereunder;

          (ii) imposes, modifies or holds applicable any reserve, special
     deposit, compulsory loan, insurance charge or similar requirement against
     assets held by, or deposits or other liabilities in or for the account of,
     or advances or loans by, or other credit extended by, or any other
     acquisition of funds by, any office of such Lender (other than any such
     reserve or other requirements with respect to Eurodollar Rate Loans that
     are reflected in the definition of Eurodollar Rate); or

          (iii) imposes any other condition (other than with respect to Taxes)
     on or affecting such Lender or its obligations hereunder or the London
     interbank market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, from time to time, within five Business Days after receipt from such
Lender of the statement referred to in subsection 2.8A, Company shall pay such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as may be necessary to compensate such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder and any tax incurred or payable by such Lender as a result
of the obligation of Company to pay such additional amounts.

     B. TAXES.

          (i) Payments to Be Free and Clear. All sums payable by Company under
     this Agreement and the other Loan Documents shall be paid free and clear
     of, and without any deduction or withholding on account of, any Indemnified
     Tax imposed, levied, collected, withheld or assessed by or within the
     United States of America or any political subdivision in or of the United
     States of America or any other jurisdiction from or to which a payment is
     made by or on behalf of Company or by any federation or organization of
     which the United States of America or any such jurisdiction is a member at
     the time of payment.

          (ii) Grossing-up of Payments. If Company or any other Person is
     required by law to make any deduction or withholding on account of any Tax
     from any sum paid or payable by Company to Administrative Agent or any
     Lender under any of the Loan Documents:


                                       63



               (a) Company shall notify Administrative Agent of any such
          requirement or any change in any such requirement within a reasonable
          time after Company becomes aware of it;

               (b) Company shall pay any such Tax when such Tax is due, such
          payment to be made (if the liability to pay is imposed on Company) for
          its own account or (if that liability is imposed on Administrative
          Agent or such Lender, as the case may be) on behalf of and in the name
          of Administrative Agent or such Lender;

               (c) if the Tax is an Indemnified Tax, the sum payable by Company
          in respect of which the relevant deduction, withholding or payment is
          required shall be increased to the extent necessary to ensure that,
          after the making of that deduction, withholding or payment,
          Administrative Agent or such Lender, as the case may be, receives on
          the due date a net sum equal to what it would have received had no
          such deduction, withholding or payment been required or made; and

               (d) as soon as practicable after any payment of such Tax to a
          Governmental Authority, Company shall deliver to Administrative Agent
          and any affected party the original or a certified copy of a receipt
          issued by such Governmental Authority evidencing such payment, a copy
          of the return reporting such payment or other evidence of such payment
          reasonably satisfactory to Administrative Agent and such affected
          party;

provided that no such additional amount shall be required to be paid to any
Lender under this subsection 2.7B(ii) except to the extent that any change after
the date on which such Lender became a Lender in any such requirement for a
deduction, withholding or payment as is mentioned herein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect on the date on which such Lender became a Lender in respect of payments
to such Lender.

          (iii) Indemnification by Company. Company shall indemnify
     Administrative Agent and each Lender, within 10 days after demand therefor,
     for the full amount of any Indemnified Taxes (including Indemnified Taxes
     imposed or asserted on or attributable to amounts payable under this
     Section 2.7) paid by Administrative Agent or such Lender, as the case may
     be, and any penalties, interest and reasonable expenses arising therefrom
     or with respect thereto, whether or not such Indemnified Taxes were
     correctly or legally imposed or asserted by the relevant Governmental
     Authority. A certificate as to the amount of such payment or liability
     delivered to Company by a Lender (with a copy to Administrative Agent), or
     by Administrative Agent on its own behalf or on behalf of a Lender, shall
     be conclusive absent manifest error.

          (iv) Evidence of Exemption from U.S. Withholding Tax.


                                       64



               (a) Each Non-US Lender shall deliver to Administrative Agent and
          to Company, on or prior to the Effective Date (in the case of each
          Lender listed on the signature pages hereof) or on or prior to the
          date of the Assignment Agreement pursuant to which it becomes a Lender
          (in the case of each other Lender), and at such other times as may be
          reasonably requested by Company or Administrative Agent, two original
          copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any
          successor forms) properly completed and duly executed by such Lender,
          or, in the case of a Non-US Lender claiming exemption from United
          States federal withholding tax under Section 871(h) or 881(c) of the
          Internal Revenue Code with respect to payments of "portfolio
          interest", a form W-8BEN, and a certificate of such Lender certifying
          that such Lender is not (i) a "bank" for purposes of Section 881(c) of
          the Internal Revenue Code, (ii) a ten-percent shareholder (within the
          meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of
          Company or Holdings or (iii) a controlled foreign corporation related
          to Company (within the meaning of Section 864(d)(4) of the Internal
          Revenue Code) in each case together with any other certificate or
          statement of exemption required under the Internal Revenue Code or the
          regulations issued thereunder to establish that such Lender is not
          subject to United States withholding tax with respect to any payments
          to such Lender of interest payable under any of the Loan Documents.

               (b) Each Non-US Lender, to the extent it does not act or ceases
          to act for its own account with respect to any portion of any sums
          paid or payable to such Lender under any of the Loan Documents (for
          example, in the case of a typical participation by such Lender), shall
          deliver to Administrative Agent and to Company, on or prior to the
          Effective Date (in the case of each Lender listed on the signature
          pages hereof), on or prior to the date of the Assignment Agreement
          pursuant to which it becomes a Lender (in the case of each other
          Lender), or on such later date when such Lender ceases to act for its
          own account with respect to any portion of any such sums paid or
          payable, and at such other times as may be reasonably requested by
          Company or Administrative Agent, (1) two original copies of the forms
          or statements required to be provided by such Lender under subsection
          2.7B(iv)(a), properly completed and duly executed by such Lender, to
          establish the portion of any such sums paid or payable with respect to
          which such Lender acts for its own account that is not subject to
          United States withholding tax, and (2) two original copies of Internal
          Revenue Service Form W-8IMY (or any successor forms) properly
          completed and duly executed by such Lender, together with any
          information, if any, such Lender chooses to transmit with such form,
          and any other certificate or statement of exemption required under the
          Internal Revenue Code or the regulations issued thereunder, to
          establish that such Lender is not acting for its own account with
          respect to a portion of any such sums payable to such Lender.

               (c) Each Non-US Lender hereby agrees, from time to time after the
          initial delivery by such Lender of such forms, whenever a lapse in
          time or change


                                       65



          in circumstances renders such forms, certificates or other evidence so
          delivered obsolete or inaccurate in any material respect, that such
          Lender shall promptly (1) deliver to Administrative Agent and to
          Company two original copies of renewals, amendments or additional or
          successor forms, properly completed and duly executed by such Lender,
          together with any other certificate or statement of exemption required
          in order to confirm or establish that such Lender is not subject to
          United States withholding tax with respect to payments to such Lender
          under the Loan Documents and, if applicable, that such Lender does not
          act for its own account with respect to any portion of such payment,
          or (2) notify Administrative Agent and Company of its inability to
          deliver any such forms, certificates or other evidence.

               (d) Company shall not be required to pay any additional amount to
          any Non-US Lender under subsection 2.7B(ii), (1) with respect to any
          Tax required to be deducted or withheld on the basis of the
          information, certificates or statements of exemption such Lender
          chooses to transmit with an Internal Revenue Service Form W-8IMY
          pursuant to subsection 2.7B(iv)(b)(2) or (2) if such Lender shall have
          failed to satisfy the requirements of clause (a), (b) or (c)(1) of
          this subsection 2.7B(iv); provided that if such Lender shall have
          satisfied the requirements of subsection 2.7B(iv)(a) on the date such
          Lender became a Lender, nothing in this subsection 2.7B(iv)(d) shall
          relieve Company of its obligation to pay any amounts pursuant to
          subsection 2.7B(ii)(c) in the event that, as a result of any change in
          any applicable law, treaty or governmental rule, regulation or order,
          or any change in the interpretation, administration or application
          thereof, such Lender is no longer properly entitled to deliver forms,
          certificates or other evidence at a subsequent date establishing the
          fact that such Lender is not subject to withholding as described in
          subsection 2.7B(iv)(a).

     C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any Government Authority charged with the interpretation or
administration thereof, or compliance by any Lender with any guideline, request
or directive regarding capital adequacy (whether or not having the force of law)
of any such Government Authority, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or other obligations
hereunder with respect to the Loans or the Letters of Credit to a level below
that which such Lender or such controlling corporation could have achieved but
for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in subsection 2.8A, Company shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such controlling corporation
for such


                                       66



reduction, increased to the extent necessary to take into account any tax
incurred or payable by such Lender as a result of the obligation of Company to
pay such additional amounts.

     D. TREATMENT OF CERTAIN REFUNDS. If Administrative Agent or a Lender
determines, in its sole discretion, that it has received a refund of any Taxes
as to which it has been indemnified by Company or with respect to which Company
has paid additional amounts pursuant to this Section 2.7, it shall pay to
Company an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by Company under this Section 2.7
with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses of Administrative Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that Company, upon the request of
Administrative Agent or such Lender, agrees to repay the amount paid over to
Company (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to Administrative Agent or such Lender in the event
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to Company
or any other Person.

     2.8  STATEMENT OF LENDERS; OBLIGATION OF LENDERS AND ISSUING LENDERS TO
          MITIGATE.

     A. STATEMENTS. Each Lender claiming compensation or reimbursement pursuant
to subsection 2.6D, 2.7 or 2.8C shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

     B. LIMITATION ON RECOVERY. Notwithstanding anything to the contrary
contained in this Agreement, Company shall not be required to compensate any
Lender for compensation or reimbursement claimed pursuant to subsection 2.6D,
2.7 or 2.8C which relate to a period more than 180 days prior to the date of
delivery of the statement under subsection 2.8A related to such compensation or
reimbursement.

     C. MITIGATION. Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7, it will use reasonable efforts to make, issue, fund or maintain the
Commitments of such Lender or the Loans or Letters of Credit of such Lender or
Issuing Lender through another lending or letter of credit office of such Lender
or Issuing Lender, if (i) as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
or Issuing Lender pursuant to subsection 2.7 would be materially reduced and
(ii) as determined by such Lender or Issuing Lender in its sole discretion, such
action would not


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otherwise be disadvantageous to such Lender or Issuing Lender; provided that
such Lender or Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection 2.8C unless
Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described above.

     2.9  REPLACEMENT OF A LENDER.

          If Company receives a statement of amounts due pursuant to subsection
2.8A from a Lender, a Revolving Lender defaults in its obligations to fund a
Revolving Loan pursuant to this Agreement, a Lender (a "NON-CONSENTING LENDER")
refuses to consent to an amendment, modification or waiver of this Agreement
that, pursuant to subsection 10.6, requires consent of 100% of the Lenders or
100% of the Lenders with Obligations directly affected and such amendment,
modification or waiver has been approved by Requisite Lenders or a Lender
becomes an Affected Lender (any such Lender, a "SUBJECT LENDER"), so long as (i)
no Potential Event of Default or Event of Default shall have occurred and be
continuing and Company has obtained a commitment from another Lender or an
Eligible Assignee to purchase at par the Subject Lender's Loans and assume the
Subject Lender's Commitments and all other obligations of the Subject Lender
hereunder, (ii) such Lender is not an Issuing Lender with respect to any Letters
of Credit outstanding (unless all such Letters of Credit are terminated or
arrangements reasonably acceptable to such Issuing Lender (such as a
"back-to-back" letter of credit) are made) and (iii) if applicable, the Subject
Lender is unwilling to withdraw the notice delivered to Company pursuant to
subsection 2.8A and/or is unwilling to remedy its default upon five Business
Days prior written notice to the Subject Lender and Administrative Agent,
Company may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of subsection 10.1B; provided that, prior
to or concurrently with such replacement, (1) the Subject Lender shall have
received payment in full of all principal, accrued interest, accrued fees and
other amounts (including all amounts under subsections 2.6D, 2.7 and/or 2.8C (if
applicable)) through such date of replacement and a release from its obligations
under the Loan Documents, (2) the processing fee, if any, required to be paid by
subsection 10.1B(i) shall have been paid to Administrative Agent, (3) all of the
requirements for such assignment contained in subsection 10.1B, including,
without limitation, the consent of Administrative Agent (if required) and the
receipt by Administrative Agent of an executed Assignment Agreement executed by
the assignee (Administrative Agent being hereby authorized to execute any
Assignment Agreement on behalf of a Subject Lender relating to the assignment of
Loans and/or Commitments of such subject Lender) and other supporting documents,
have been fulfilled, and (4) in the event such Subject Lender is a
Non-Consenting Lender, each assignee shall consent, at the time of such
assignment, to each matter in respect of which such Subject Lender was a
Non-Consenting Lender. For the avoidance of doubt, if a Lender is a
Non-Consenting Lender solely because it refused to consent to an amendment,
modification or waiver that required the consent of 100% of Lenders with
Obligations directly affected thereby (which amendment, modification or waiver
did not accordingly require the consent of 100% of all Lenders), the Loans and
Commitments of such Non-Consenting Lender that are subject to the assignments
required by this subsection 2.9 shall include only those Loans and Commitments
that constitute the Obligations directly affected by


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the amendment, modification or waiver to which such Non-Consenting Lender
refused to provide its consent.

SECTION 3. LETTERS OF CREDIT

     3.1  ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
          THEREIN.

     A. LETTERS OF CREDIT. Company may request, in accordance with the
provisions of this subsection 3.1, from time to time during the period from the
Closing Date to but excluding the 30th day prior to the Revolving Loan
Commitment Termination Date, that one or more Revolving Lenders issue Letters of
Credit payable on a sight basis for the account of Company for the general
corporate purposes of Company or a Subsidiary of Company. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Revolving Lenders may,
but (except as provided in subsection 3.1B(ii)) shall not be obligated to, issue
such Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Revolving Lender issue (and no
Revolving Lender shall issue):

          (i) any Letter of Credit if, after giving effect to such issuance, the
     Total Utilization of Revolving Loan Commitments would exceed the Revolving
     Loan Commitment Amount then in effect;

          (ii) any Letter of Credit if, after giving effect to such issuance,
     the Letter of Credit Usage would exceed $25,000,000;

          (iii) any Standby Letter of Credit having an expiration date later
     than the earlier of (a) five Business Days prior to the Revolving Loan
     Commitment Termination Date and (b) the date which is one year from the
     date of issuance of such Standby Letter of Credit; provided that the
     immediately preceding clause (b) shall not prevent any Issuing Lender from
     agreeing that a Standby Letter of Credit will automatically be extended for
     one or more successive periods not to exceed one year each unless such
     Issuing Lender elects not to extend for any such additional period; and
     provided, further that such Issuing Lender shall elect not to extend such
     Standby Letter of Credit if it has knowledge that an Event of Default has
     occurred and is continuing (and has not been waived in accordance with
     subsection 10.6) at the time such Issuing Lender must elect whether or not
     to allow such extension;

          (iv) any Standby Letter of Credit issued for the purpose of supporting
     (a) trade payables or (b) any Indebtedness constituting "antecedent debt"
     (as that term is used in Section 547 of the Bankruptcy Code);

          (v) any Commercial Letter of Credit having an expiration date (a)
     later than the earlier of (1) the date which is 30 days prior to the
     Revolving Loan Commitment Termination Date and (2) the date which is 180
     days from the date of issuance of such


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     Commercial Letter of Credit or (b) that is otherwise unacceptable to the
     applicable Issuing Lender in its reasonable discretion; or

          (vi) any Letter of Credit denominated in a currency other than
     Dollars.

     B. MECHANICS OF ISSUANCE.

          (i) Request for Issuance. Whenever Company desires the issuance of a
     Letter of Credit, it shall deliver to Administrative Agent a Request for
     Issuance no later than 1:00 P.M. (New York City time) at least three
     Business Days (in the case of Standby Letters of Credit) or five Business
     Days (in the case of Commercial Letters of Credit), or in each case such
     shorter period as may be agreed to by the Issuing Lender in any particular
     instance, in advance of the proposed date of issuance. The Issuing Lender,
     in its reasonable discretion, may require changes in the text of the
     proposed Letter of Credit or any documents described in or attached to the
     Request for Issuance. In furtherance of the provisions of subsection 10.8,
     and not in limitation thereof, Company may submit Requests for Issuance by
     telefacsimile and Administrative Agent and Issuing Lenders may rely and act
     upon any such Request for Issuance without receiving an original signed
     copy thereof. No Letter of Credit shall require payment against a
     conforming demand for payment to be made thereunder on the same business
     day (under the laws of the jurisdiction in which the office of the Issuing
     Lender to which such demand for payment is required to be presented is
     located) on which such demand for payment is presented if such presentation
     is made after 10:00 A.M. (in the time zone of such office of the Issuing
     Lender) on such business day.

          Company shall notify the applicable Issuing Lender (and Administrative
     Agent, if Administrative Agent is not such Issuing Lender) prior to the
     issuance of any Letter of Credit in the event that any of the matters to
     which Company is required to certify in the applicable Request for Issuance
     is no longer true and correct as of the proposed date of issuance of such
     Letter of Credit, and upon the issuance of any Letter of Credit Company
     shall be deemed to have re-certified, as of the date of such issuance, as
     to the matters to which Company is required to certify in the applicable
     Request for Issuance.

          (ii) Determination of Issuing Lender. Upon receipt by Administrative
     Agent of a Request for Issuance pursuant to subsection 3.1B(i) requesting
     the issuance of a Letter of Credit, in the event Administrative Agent
     elects to issue such Letter of Credit, Administrative Agent shall promptly
     so notify Company, and Administrative Agent shall be the Issuing Lender
     with respect thereto. In the event that Administrative Agent, in its sole
     discretion, elects not to issue such Letter of Credit, Administrative Agent
     shall promptly so notify Company, whereupon Company may request any other
     Revolving Lender to issue such Letter of Credit by delivering to such
     Revolving Lender a copy of the applicable Request for Issuance. Any
     Revolving Lender so requested to issue such Letter of Credit shall promptly
     notify Company and Administrative Agent whether or not, in its sole
     discretion, it has elected to issue such Letter of Credit, and any such
     Revolving Lender that so elects to issue such Letter of Credit shall be the
     Issuing Lender with respect thereto. In the event that all other Revolving
     Lenders shall have declined to


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     issue such Letter of Credit, notwithstanding the prior election of
     Administrative Agent not to issue such Letter of Credit, Administrative
     Agent shall be obligated to issue such Letter of Credit and shall be the
     Issuing Lender with respect thereto. The Issuing Lender with respect to
     each Letter of Credit shall be required to issue such Letter of Credit
     notwithstanding the fact that the Letter of Credit Usage with respect to
     such Letter of Credit and with respect to all other Letters of Credit
     issued by such Issuing Lender, when aggregated with such Issuing Lender's
     outstanding Revolving Loans and participations in Swing Line Loans, may
     exceed the amount of such Issuing Lender's Revolving Loan Commitment then
     in effect.

          (iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
     accordance with subsection 10.6) of the conditions set forth in subsection
     4.3, the Issuing Lender shall issue the requested Letter of Credit in
     accordance with the Issuing Lender's standard operating procedures.

          (iv) Notification to Revolving Lenders. Upon the issuance of or
     amendment to any Standby Letter of Credit the applicable Issuing Lender
     shall promptly notify Administrative Agent and Company of such issuance or
     amendment in writing. Upon receipt of such notice (or, if Administrative
     Agent is the Issuing Lender, together with such notice), Administrative
     Agent shall notify each Revolving Lender in writing of such issuance or
     amendment and the amount of such Revolving Lender's respective
     participation in such Standby Letter of Credit or amendment, and, if so
     requested by a Revolving Lender, Administrative Agent shall provide such
     Lender with a copy of such Letter of Credit or amendment. In the case of
     Commercial Letters of Credit, in the event that Issuing Lender is other
     than Administrative Agent, such Issuing Lender will send by facsimile
     transmission to Administrative Agent, promptly upon the first Business Day
     of each week, a report of its daily aggregate maximum amount available for
     drawing under Commercial Letters of Credit for the previous week.
     Administrative Agent shall notify each Revolving Lender in writing on a
     quarterly basis of the contents thereof.

     C. REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount that is or at any time may become available to be drawn
thereunder. On the Effective Date, each Revolving Lender shall be deemed to and
hereby agrees to have irrevocably purchased from the Issuing Lender a
participation in all Letters of Credit outstanding on the Effective Date and any
drawings honored thereunder in an amount equal to such Revolving Lender's Pro
Rata Share of the maximum amount that is or at any time may become available to
be drawn thereunder.


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     3.2  LETTER OF CREDIT FEES.

          Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:

          (i) with respect to each Standby Letter of Credit, (a) a fronting fee,
     payable directly to the applicable Issuing Lender for its own account,
     equal to a percentage per annum to be agreed upon by the Issuing Lender and
     Company of the daily amount available to be drawn under such Standby Letter
     of Credit (but not to exceed 0.125% per annum) and (b) a letter of credit
     fee, payable to Administrative Agent for the account of Revolving Lenders,
     equal to the Applicable Margin for Eurodollar Rate Loans plus, upon the
     application of increased rates of interest pursuant to subsection 2.2E, 2%
     per annum, multiplied by the daily amount available to be drawn under such
     Standby Letter of Credit, each such fronting fee or letter of credit fee to
     be payable in arrears on and to (but excluding) the last Business Day of
     each of March, June, September and December of each year and on the date of
     termination of the Revolving Loan Commitments hereunder and computed on the
     basis of a 360-day year for the actual number of days elapsed;

          (ii) with respect to each Commercial Letter of Credit, (a) a fronting
     fee, payable directly to the applicable Issuing Lender for its own account,
     equal to a percentage per annum to be agreed upon by the Issuing Lender and
     Company of the daily amount available to be drawn under such Commercial
     Letter of Credit (but not to exceed 0.125% per annum) and (b) a letter of
     credit fee, payable to Administrative Agent for the account of Revolving
     Lenders, equal to the Applicable Margin for Eurodollar Rate Loans plus,
     upon the application of increased rates of interest pursuant to subsection
     2.2E, 2% per annum, multiplied by the daily amount available to be drawn
     under such Commercial Letter of Credit, each such fronting fee or letter of
     credit fee to be payable in arrears on and to (but excluding) the last
     Business Day of each of March, June, September and December of each year
     and on the date of the termination of the Revolving Loan Commitments
     hereunder and computed on the basis of a 360-day year for the actual number
     of days elapsed; and

          (iii) with respect to the issuance, amendment or transfer of each
     Letter of Credit and each payment of a drawing made thereunder (without
     duplication of the fees payable under clauses (i) and (ii) above),
     documentary and processing charges payable directly to the applicable
     Issuing Lender for its own account in accordance with such Issuing Lender's
     standard schedule for such charges in effect at the time of such issuance,
     amendment, transfer or payment, as the case may be.

For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or clause (ii)(b) of this subsection 3.2,
Administrative Agent shall distribute to each Revolving Lender its Pro Rata
Share of such amount.


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     3.3  DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.

     A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.

     B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent (each such notice, a "DRAWING NOTICE") of the Business Day
on which such drawing is to be or was honored (the "DRAWING DATE"), and Company
shall reimburse such Issuing Lender on the date (the "REIMBURSEMENT DATE")
determined as follows: (a) the Drawing Date, if the applicable Drawing Notice is
received on or prior to 12:00 Noon (New York City time) on the Drawing Date or
(b) on the first Business Day following the date of delivery of the Drawing
Notice, if the applicable Drawing Notice is received after 12:00 Noon (New York
City time) on the Drawing Date, in each case, in an amount in Dollars and in
same day funds equal to the amount of such payment; provided that, anything
contained in this Agreement to the contrary notwithstanding, unless Company
shall have notified Administrative Agent and such Issuing Lender prior to 1:00
P.M. (New York City time) on the Reimbursement Date that Company intends to
reimburse such Issuing Lender for the amount of such payment with funds other
than the proceeds of Revolving Loans, Administrative Agent shall notify each
Revolving Lender of such drawing and the amount thereof, and on the
Reimbursement Date, the Revolving Lenders shall make Revolving Loans that are
Base Rate Loans in the amount of such payment, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for
the amount of such payment; and provided, further that if for any reason
proceeds of Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such payment, Company
shall reimburse such Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such payment over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to make
Revolving Loans on the terms and conditions set forth in this Agreement, and
Company shall retain any and all rights it may have against any Revolving Lender
resulting from the failure of such Revolving Lender to make such Revolving Loans
under this subsection 3.3B.

     C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF CREDIT.

          (i) Payment by Revolving Lenders. In the event that any Issuing Lender
     shall not have been reimbursed on the Reimbursement Date as provided in
     subsection 3.3B in an amount equal to the amount of any payment by such
     Issuing Lender under a Letter of Credit issued by it, such Issuing Lender
     shall promptly notify Administrative Agent, who shall notify each other
     Revolving Lender of the unreimbursed amount of such honored drawing and of
     such other Revolving Lender's respective participation therein based on
     such Revolving Lender's Pro Rata Share. Each Revolving Lender (other than
     such


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     Issuing Lender) shall make available to Administrative Agent an amount
     equal to its respective participation, in Dollars and in same day funds, at
     the Funding and Payment Account, not later than 12:00 Noon (New York City
     time) on the first Business Day after the date notified by Administrative
     Agent and Administrative Agent shall make available to such Issuing Lender
     in Dollars in same day funds, at the office of such Issuing Lender on such
     Business Day, the aggregate amount of the participation payments so
     received by Administrative Agent. In the event that any Revolving Lender
     fails to make available to Administrative Agent on such Business Day the
     amount of such Revolving Lender's participation in such Letter of Credit as
     provided in this subsection 3.3C, such Issuing Lender shall be entitled to
     recover such amount on demand from such Revolving Lender together with
     interest thereon at the Federal Funds Effective Rate. Nothing in this
     subsection 3.3C shall be deemed to prejudice the right of Administrative
     Agent or Company to recover, for the benefit of Revolving Lenders, from any
     Issuing Lender any amounts made available to such Issuing Lender pursuant
     to this subsection 3.3C in the event that it is determined by the final
     judgment of a court of competent jurisdiction that the payment with respect
     to a Letter of Credit by such Issuing Lender in respect of which such
     participation payments were made by Revolving Lenders constituted gross
     negligence or willful misconduct on the part of such Issuing Lender.

          (ii) Distribution to Lenders of Reimbursements Received From Company.
     In the event any Issuing Lender shall have been reimbursed by other
     Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion of
     any payment by such Issuing Lender under a Letter of Credit issued by it,
     and Administrative Agent or such Issuing Lender thereafter receives any
     payments from Company in reimbursement of such payment under the Letter of
     Credit, to the extent any such payment is received by such Issuing Lender,
     it shall distribute such payment to Administrative Agent, and
     Administrative Agent shall distribute to each other Revolving Lender that
     has paid all amounts payable by it under subsection 3.3C(i) with respect to
     such payment such Revolving Lender's Pro Rata Share of all payments
     subsequently received by Administrative Agent or by such Issuing Lender
     from Company. Any such distribution shall be made to a Revolving Lender at
     the account specified in subsection 2.4C(iii).

     D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.

          (i) Payment of Interest by Company. Company agrees to pay to
     Administrative Agent, with respect to payments under any Letters of Credit
     issued by any Issuing Lender, interest on the amount paid by such Issuing
     Lender in respect of each such payment from the Drawing Date thereof to but
     excluding the date such amount is reimbursed by Company (including any such
     reimbursement out of the proceeds of Revolving Loans pursuant to subsection
     3.3B) at a rate equal to (a) for the period from the Drawing Date with
     respect to such payment to but excluding the Reimbursement Date, the rate
     then in effect under this Agreement with respect to Revolving Loans that
     are Base Rate Loans and (b) thereafter, a rate which is 2% per annum in
     excess of the rate of interest otherwise payable under this Agreement with
     respect to Revolving Loans that are Base Rate Loans. Interest payable
     pursuant to this subsection 3.3D(i) shall be computed on the basis of a 365
     or 366-day year, as the case may be, for the actual


                                       74



     number of days elapsed in the period during which it accrues and shall be
     payable on the Reimbursement Date and, if not so paid, shall be payable in
     accordance with subsection 2.2E.

          (ii) Distribution of Interest Payments by Administrative Agent.
     Promptly upon receipt by Administrative Agent of any payment of interest
     pursuant to subsection 3.3D(i) with respect to a payment under a Letter of
     Credit, (a) Administrative Agent shall distribute to (x) each Revolving
     Lender (including the Revolving Lender that paid such drawing, out of the
     interest received by Administrative Agent in respect of the period from the
     date such drawing is honored to but excluding the date on which the
     applicable Issuing Lender is reimbursed for the amount of such payment
     (including any such reimbursement out of the proceeds of Revolving Loans
     pursuant to subsection 3.3B), the amount that such Revolving Lender would
     have been entitled to receive in respect of the letter of credit fee that
     would have been payable in respect of such Letter of Credit for such period
     pursuant to subsection 3.2 if no drawing had been honored under such Letter
     of Credit and (y) such Issuing Lender the amount, if any, remaining after
     payment of the amounts applied pursuant to the immediately preceding clause
     (x), and (b) in the event such Issuing Lender shall have been reimbursed by
     other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
     portion of such payment, Administrative Agent shall distribute to each
     Revolving Lender (including such Issuing Lender) that has paid all amounts
     payable by it under subsection 3.3C(i) with respect to such payment such
     Revolving Lender's Pro Rata Share of any interest received by
     Administrative Agent in respect of that portion of such payment so made by
     Revolving Lenders for the period from the date on which such Issuing Lender
     was so reimbursed to but excluding the date on which such portion of such
     payment is reimbursed by Company. Any such distribution shall be made to a
     Revolving Lender at the account specified in subsection 2.4C(iii).

     3.4  OBLIGATIONS ABSOLUTE.

          The obligation of Company to reimburse each Issuing Lender for
payments under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to subsection 3.3B and the obligations
of Revolving Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:

          (i) any lack of validity or enforceability of any Letter of Credit;

          (ii) the existence of any claim, set-off, defense or other right which
     Company or any Lender may have at any time against a beneficiary or any
     transferee of any Letter of Credit (or any Persons for whom any such
     transferee may be acting), any Issuing Lender or other Revolving Lender or
     any other Person or, in the case of a Revolving Lender, against Company,
     whether in connection with this Agreement, the transactions contemplated
     herein or any unrelated transaction (including any underlying transaction
     between Company or one of its Subsidiaries and the beneficiary for which
     any Letter of Credit was procured);


                                       75



          (iii) any draft or other document presented under any Letter of Credit
     proving to be forged, fraudulent, invalid or insufficient in any respect or
     any statement therein being untrue or inaccurate in any respect;

          (iv) payment by the applicable Issuing Lender to the beneficiary under
     any Letter of Credit against presentation of a draft or other document
     which does not substantially comply with the terms of such Letter of
     Credit;

          (v) any adverse change in the business, operations, properties,
     assets, condition (financial or otherwise) or prospects of Company or any
     of its Subsidiaries;

          (vi) any breach of this Agreement or any other Loan Document by any
     party thereto;

          (vii) any other circumstance or happening whatsoever, whether or not
     similar to any of the foregoing; or

          (viii) the fact that an Event of Default or a Potential Event of
     Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

     3.5  NATURE OF ISSUING LENDERS' DUTIES.

          As between Company and any Issuing Lender, Company assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a


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Government Authority, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Lender's rights or powers hereunder.

          In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.

          Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.

SECTION 4. CONDITIONS TO EFFECTIVENESS AND REVOLVING LOANS AND LETTERS OF CREDIT

     4.1  CONDITIONS TO EFFECTIVENESS.

          This Agreement shall become effective only upon the satisfaction of
all of the following conditions precedent on or before February 10, 2006 (the
date of satisfaction of such conditions being referred to herein as the
"EFFECTIVE DATE"):

     A. LOAN PARTY DOCUMENTS. On or before the Effective Date, Company shall,
and shall cause each other Loan Party to, deliver to Administrative Agent the
following with respect to Company or such Loan Party, as the case may be, each,
unless otherwise noted, dated the Effective Date:

          (i) To the extent not delivered to Administrative Agent in connection
     with the Existing First Lien Credit Agreement, copies of the Organizational
     Documents of such Person, certified by the Secretary of State of its
     jurisdiction of organization or, if such document is of a type that may not
     be so certified, certified by the secretary or similar officer of the
     applicable Loan Party, together with a good standing certificate from the
     Secretary of State of its jurisdiction of organization and each other state
     in which such Person is qualified to do business and, to the extent
     generally available, a certificate or other evidence of good standing as to
     payment of any applicable franchise or similar taxes from the appropriate
     taxing authority of each of such jurisdictions, each dated a recent date
     prior to the Effective Date;

          (ii) Resolutions of the Governing Body of such Person approving and
     authorizing the execution, delivery and performance of the Loan Documents
     to which it is a party, certified as of the Effective Date by the secretary
     or similar officer of such Person as being in full force and effect without
     modification or amendment;

          (iii) Signature and incumbency certificates of the officers of such
     Person executing the Loan Documents to which it is a party;


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          (iv) Executed originals of this Agreement, the Holdings Security
     Agreement, the Restatement Consent and any other document to be executed by
     a Loan Party hereunder; and

          (v) Such other documents as Administrative Agent may reasonably
     request.

     B. FEES. Company shall have paid to Administrative Agent, for distribution
(as appropriate) to Administrative Agent and Lenders, the fees payable on the
Effective Date referred to in subsection 2.3.

     C. CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT. The corporate
organizational structure, capital structure and ownership of Holdings and its
Subsidiaries, both before and after giving effect to the Acquisition shall be as
set forth on Schedule 4.1C annexed hereto.

     D. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company shall
have delivered to Administrative Agent an Officer's Certificate, in form and
substance reasonably satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 and in the other Loan Documents
are true, correct and complete in all material respects on and as of the
Effective Date to the same extent as though made on and as of that date (or, to
the extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date) and that Company shall
have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Effective Date except as otherwise disclosed to and agreed to
in writing by Administrative Agent; provided that, if a representation and
warranty, covenant or condition is qualified as to materiality, the applicable
materiality qualifier set forth in this subsection 4.1D shall be disregarded
with respect to such representation and warranty, covenant or condition for
purposes of this condition.

     E. FINANCIAL STATEMENTS; PRO FORMA FINANCIAL STATEMENTS; FINANCIAL PLANS.

          (i) Financial Statements; Pro Forma Financial Statements. On or before
     the Effective Date, Lenders shall have received from Company (a) (1)
     audited financial statements of Company and its Subsidiaries for Fiscal
     Years 2002, 2003 and 2004, consisting of the consolidated balance sheet and
     the related consolidated statements of income and cash flows for such
     Fiscal Years, (2) unaudited financial statements of Company and its
     Subsidiaries for each Fiscal Quarter ending after December 31, 2004 but
     before 45 days prior to the Effective Date, and, consisting of the
     consolidated balance sheet and the related consolidated statements of
     income and cash flows for the applicable period ending the last day of such
     Fiscal Quarter and (3) unaudited financial statements of Company and its
     Subsidiaries for each calendar month ending after the last Fiscal Quarter
     for which financial statements are delivered pursuant to the foregoing
     clause (2) but before 30 days prior to the Effective Date, and, consisting
     of the consolidated balance sheet and the related consolidated statements
     of income, stockholders' equity and cash flows for the applicable period
     ending on the last day of each such calendar month, in


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     each case in reasonable detail and certified by the chief financial officer
     of Company that they fairly present the financial condition of Company and
     its Subsidiaries as at the dates indicated and the results of their
     operations and their cash flows for the periods indicated, subject to
     changes resulting from audit and normal year-end adjustments, and such
     financial statements shall not be materially inconsistent with the
     financial statements or forecasts previously provided to Lead Arranger and
     (b) pro forma consolidated balance sheet of Holdings and its Subsidiaries
     and related pro forma consolidated statements of income as of and for the
     twelve-month period ending as of the most recent month ended at least 30
     days prior to the Effective Date, prepared in accordance with GAAP and
     reflecting the consummation of the Transactions and payment of Acquisition
     Transaction Costs and the other transactions contemplated by the Loan
     Documents as if the Transactions and payment of Acquisition Transaction
     Costs had occurred as of such date (in the case of such balance sheet) or
     at the beginning of such period (in the case of such other financial
     statements), which pro forma financial statements shall be in form and
     substance reasonably satisfactory to Administrative Agent and which shall
     not be materially inconsistent with the forecasts previously provided to
     Lead Arranger.

          (ii) Financial Plans. On or before the Effective Date, Lenders shall
     have received, a consolidated plan and financial forecast for Fiscal Years
     2005 through 2012 and summary information for each Fiscal Quarter in Fiscal
     Years 2005 and 2006, including (a) forecasted consolidated balance sheet
     and forecasted consolidated statements of income and cash flows of Holdings
     and its Subsidiaries for each such Fiscal Year, together with an
     explanation of the assumptions on which such forecasts are based, (b) the
     amount of forecasted unallocated overhead for each such Fiscal Year, and
     (c) such other information and projections as any Lender may reasonably
     request, in each case, in form and substance reasonably satisfactory to
     Administrative Agent.

     F. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have received
originally executed copies of one or more favorable written opinions of Latham &
Watkins LLP, counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Effective
Date and setting forth substantially the matters in the opinions designated in
Exhibit IX annexed hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request (this Agreement constituting
a written request by Company to such counsel to deliver such opinions to
Lenders).

     G. SOLVENCY ASSURANCES. On the Effective Date, Administrative Agent shall
have received an Officer's Certificate signed by the chief financial officer of
Company dated the Effective Date, substantially in the form of Exhibit XII
annexed hereto and with appropriate attachments, in each case demonstrating
that, after giving effect to the consummation of the transactions contemplated
by the Loan Documents, Company and Subsidiary Guarantors on a consolidated basis
will be Solvent.

     H. EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that


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Collateral Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under subsection 6.4.

     I. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations, Healthcare Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the Transactions
and the other transactions contemplated by the Loan Documents and the continued
operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the Effective Date. Each
such Governmental Authorization, Healthcare Authorization and consent shall be
in full force and effect, except in a case where the failure to obtain or
maintain a Governmental Authorization, Healthcare Authorization or consent,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. All applicable waiting periods shall have
expired without any such action being taken or threatened by any competent
Government Authority that would restrain, prevent or otherwise impose adverse
conditions on the transactions contemplated by the Loan Documents or the
financing thereof. No such action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable Government Authority to take action
to set aside its consent on its own motion shall have expired.

     J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Administrative Agent
shall have received evidence reasonably satisfactory to it that Holdings,
Company and Subsidiary Guarantors shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings (other than the filing or recording of items
described in clauses (ii), (iii) and (iv) below) that may be necessary or, in
the opinion of Administrative Agent, desirable in order to create in favor of
Collateral Agent, for the benefit of Lenders, a valid and (upon such filing and
recording) perfected First Priority security interest in the entire personal and
mixed property Collateral. Such actions shall include the following:

          (i) Stock Certificates and Instruments. To the extent not previously
     delivered to Collateral Agent, delivery to Collateral Agent of (a)
     certificates (which certificates shall be accompanied by irrevocable
     undated stock powers, duly endorsed in blank and otherwise reasonably
     satisfactory in form and substance to Collateral Agent) representing all
     certificated Equity Interests pledged pursuant to the Security Agreement
     and any Foreign Pledge Agreement (Administrative Agent and Lenders
     acknowledge that such pledge will not cover any Equity Interests in
     Fountain View Reinsurance, Inc.) and (b) all promissory notes or other
     instruments (duly endorsed, where appropriate, in a manner satisfactory to
     Collateral Agent) evidencing any Collateral;

          (ii) UCC Financing Statements and Fixture Filings. To the extent not
     previously delivered to Collateral Agent, delivery to Collateral Agent of
     duly completed UCC financing statements and/or amendments thereto and,
     where appropriate, fixture filings, with respect to all personal and mixed
     property Collateral of such Loan Party, for filing in all jurisdictions as
     may be necessary or, in the opinion of Administrative Agent


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     or Collateral Agent, desirable to perfect or continue the perfection of the
     security interests created in such Collateral pursuant to the Collateral
     Documents;

          (iii) Control Agreements. To the extent not previously delivered to
     Collateral Agent, delivery to Collateral Agent of Control Agreements with
     financial institutions and other Persons in order to perfect Liens in
     respect of Deposit Accounts, Securities Accounts and other Collateral
     pursuant to the Collateral Documents;

     K. INTEREST RATE PROTECTION. Company shall have entered into one or more
Interest Rate Agreements that result in at least (i) 30% if the Bridge Facility
has been funded and the Senior Subordinated Notes have not been issued or (ii)
40% if the Senior Subordinate Notes have been issued, of the aggregate principal
amount of its funded long-term Indebtedness of Company and its Subsidiaries
being effectively subject to a fixed or a maximum interest rate for a term of at
least three years, each such Interest Rate Agreement to be in form and substance
reasonably satisfactory to Administrative Agent.

     L. PATRIOT ACT COMPLIANCE. At least five Business Days prior to the
Effective Date, Administrative Agent shall have received all documentation and
other information required by bank regulatory authorities under the applicable
"know your customer" and anti-money laundering rules and regulations, including
without limitation the Patriot Act and requested by Administrative Agent or any
Lender.

     M. MATERIAL ADVERSE EFFECT. No event, change or condition shall have
occurred since December 31, 2004 that, individually or in the aggregate, has
had, or could reasonably be expected to have, a material adverse effect on the
assets, properties, financial condition, business or results of operations of
Company and its Subsidiaries, taken as a whole; provided, however, that in no
event shall any of the following be taken into account in the determination of
whether such a material adverse effect has occurred: (i) any change resulting
from conditions generally affecting any of the industries in which Company or
any of its Subsidiaries operates or from changes in general business or economic
conditions if, in each case, they do not have a disproportionate adverse effect
on Company and its Subsidiaries, and (ii) any change resulting from the
compliance by Company or any of its Subsidiaries with the terms of, or the
taking of any action by Company or any of its Subsidiaries required by, the
Acquisition Agreement.

     N. REPAYMENT OF INDEBTEDNESS UNDER EXISTING SECOND LIEN CREDIT AGREEMENT.
On the Effective Date, Company and its Subsidiaries shall have (a) repaid in
full all of the obligations under the Existing Second Lien Credit Agreement,
including the payment of any prepayment premiums, (b) terminated any commitments
to lend or make other extensions of credit thereunder and (c) delivered to
Administrative Agent all documents or instruments necessary to release all Liens
securing the Existing Second Lien Credit Agreement. Administrative Agent shall
have received an Officer's Certificate of Company to the effect of the
foregoing.

     O. RATINGS. On or before the Effective Date, the credit facilities
contemplated hereby shall have received ratings from both S&P and Moody's, such
ratings shall remain in effect as of the Effective Date, and such ratings shall
not have a negative outlook.


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     P. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.

     Q. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS. To the extent
such delivery is required pursuant to the applicable Related Agreement,
Administrative Agent shall have received copies of each of the opinions of
counsel delivered to the parties under the Related Agreements, together with a
letter from each such counsel (to the extent not inconsistent with such
counsel's established internal policies) authorizing Lenders to rely upon such
opinion to the same extent as though it were addressed to Lenders.

     R. PROCEEDS OF DEBT AND EQUITY CAPITALIZATION OF HOLDINGS AND COMPANY.

          (i) Debt and Equity Capitalization of Holdings. On or before the
     Effective Date, Onex and other investors shall have purchased all of the
     outstanding Equity Interests of Holdings.

          (ii) Debt and Equity Capitalization of Company. On or before the
     Effective Date, (a) Holdings shall have received, as common or preferred
     equity, from the sale of Holdings Equity Interests and from the exchange of
     Company Equity Interests for Holdings Equity Interests, an amount not less
     than $221,000,000, and 100% of the cash proceeds of such common or
     preferred equity shall be contributed to Merger Sub (b) Company shall have
     either (1) issued up to $200,000,000 in aggregate principal amount of
     Senior Subordinated Notes (provided that the aggregate principal amount of
     the Senior Subordinated Notes issued shall not be less than the amount
     necessary to repay in full all of the obligations under the Existing Second
     Lien Credit Agreement, including the payment of any prepayment premiums and
     provide sufficient proceeds to otherwise consummate the Transactions), or
     (2) borrowed not less than $200,000,000 under the Bridge Facility, and (c)
     all of the Company's Series A Preferred Stock (as defined in the Existing
     First Lien Credit Agreement) shall have been returned to the Company and
     cancelled.

          (iii) Use of Proceeds by Merger Sub and Company. Company and Merger
     Sub shall have provided evidence satisfactory to Administrative Agent that
     the proceeds of the debt and equity capitalization of Merger Sub and
     Company described in the immediately preceding clause (ii) have been
     irrevocably committed to the payment of a portion of the Acquisition
     Financing Requirements.

     S. RELATED AGREEMENTS

          (i) Approval of Certain Related Agreements. The Certificate of Merger,
     the Holdings Certificate of Designations, the Management Exchange
     Agreements and to the


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     extent the Senior Subordinated Notes are issued, the Senior Subordinated
     Note Indenture, and to the extent the Bridge Facility is funded, the Bridge
     Loan Agreement, shall each be reasonably satisfactory in form and substance
     to Administrative Agent.

          (ii) Related Agreements in Full Force and Effect. Administrative Agent
     shall have received a fully executed or conformed copy of each Related
     Agreement and any material documents executed in connection therewith, and
     each Related Agreement shall be in full force and effect and no provision
     thereof shall have been modified or waived in any respect determined by
     Administrative Agent to be material, in each case without the consent of
     Administrative Agent.

     T. CONSUMMATION OF ACQUISITION.

          (i) All conditions to the Acquisition set forth in Article 5 of the
     Acquisition Agreement shall have been satisfied or the fulfillment of any
     such conditions shall have been waived with the consent of Administrative
     Agent (such consent not to be unreasonably withheld or delayed);

          (ii) The Acquisition shall have become or shall concurrently become
     effective in accordance with the terms of the Acquisition Agreement;

          (iii) The Merger shall have become or shall concurrently become
     effective in accordance with the terms of the Acquisition Agreement, the
     Certificate of Merger and the laws of the State of Delaware;

          (iv) Acquisition Transaction Costs shall not exceed $20,000,000, and
     Administrative Agent shall have received evidence to its reasonable
     satisfaction to such effect; and

          (v) Administrative Agent shall have received an Officer's Certificate
     of Company to the effect set forth in clauses (i)-(iv) above and stating
     that Company will proceed to consummate the Acquisition on the Effective
     Date.

     U. CONSOLIDATED TOTAL LEVERAGE RATIO. As of the Effective Date, Company's
Consolidated Total Leverage Ratio for the four-fiscal quarter period most
recently ended prior to the Effective Date (prepared in accordance with
Regulation S-X under the Securities Act to give pro forma effect to the
Transactions as if they had occurred at the beginning of such four-fiscal
quarter period and with such other adjustments reasonably satisfactory to
Administrative Agent) be an amount which, when rounded to the nearest tenth, is
no more than 5.6 to 1.0. Administrative Agent shall have received a certificate
from the chief financial officer of Company as to the foregoing and
demonstrating in reasonable detail the calculation of the Consolidated Total
Leverage Ratio.

     V. NO DEFAULT. As of the Effective Date, no Potential Event of Default or
Event of Default shall have occurred and be continuing or result from the
consummation of the


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Transactions. Administrative Agent shall have received an Officer's Certificate
as to the foregoing.

     W. LENDER CONSENT.

          (i) Administrative Agent and Existing Requisite Lenders (after giving
     effect to any assignments on the Effective Date) shall have executed this
     Agreement or otherwise consented in writing to the amendment and
     restatement of the Existing First Lien Credit Agreement on the terms and
     conditions set forth in this Agreement; and

          (ii) Each Increasing Revolving Lender and each New Revolving Lender
     shall have executed this Agreement.

     4.2  CONDITIONS TO ALL REVOLVING LOANS.

          The obligation of each Lender to make its Revolving Loans on each
Funding Date are subject to the following conditions precedent:

     A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, a duly executed Notice of
Borrowing, in each case signed by a duly authorized Officer of Company.

     B. As of that Funding Date:

          (i) The representations and warranties contained herein and in the
     other Loan Documents shall be true, correct and complete in all material
     respects on and as of that Funding Date to the same extent as though made
     on and as of that date, except to the extent such representations and
     warranties specifically relate to an earlier date, in which case such
     representations and warranties shall have been true, correct and complete
     in all material respects on and as of such earlier date; provided, that, if
     a representation and warranty is qualified as to materiality, the
     materiality qualifier set forth in this subsection 4.2B(i) shall be
     disregarded with respect to such representation and warranty, for purposes
     of this condition;

          (ii) No event shall have occurred and be continuing or would result
     from the consummation of the borrowing contemplated by such Notice of
     Borrowing that would constitute an Event of Default or a Potential Event of
     Default;

          (iii) Each Loan Party shall have performed in all material respects
     all agreements and satisfied all conditions which this Agreement provides
     shall be performed or satisfied by it on or before that Funding Date;

          (iv) No order, judgment or decree of any arbitrator or Government
     Authority shall purport to enjoin or restrain such Lender from making the
     Revolving Loans to be made by it on that Funding Date; and


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          (v) Company shall have delivered such other certificates or documents
     that Administrative Agent shall reasonably request, in form and substance
     reasonably satisfactory to Administrative Agent.

     4.3  CONDITIONS TO LETTERS OF CREDIT.

          The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:

     A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.

     B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Request for Issuance (or a facsimile
copy thereof) in each case signed by a duly authorized Officer of Company,
together with all other information specified in subsection 3.1B(i) and such
other documents or information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.

     C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B (excluding clause (iii) thereof) shall be
satisfied to the same extent as if the issuance of such Letter of Credit were
the making of a Loan and the date of issuance of such Letter of Credit were a
Funding Date.

SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders to enter into this Agreement and to
purchase and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce Revolving Lenders to purchase participations therein,
Company represents and warrants to each Lender:

     5.1  ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
          SUBSIDIARIES.

     A. ORGANIZATION AND POWERS. Each of Holdings and Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified in Schedule 5.1 annexed hereto. Each
of Holdings and Company has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.

     B. QUALIFICATION AND GOOD STANDING. Each of Holdings and Company is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and could not reasonably be expected to result in a
Material Adverse Effect.


                                       85



     C. CONDUCT OF BUSINESS. Holdings and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.11.

     D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the Effective
Date and their jurisdictions of organization are identified in Schedule 5.1
annexed hereto, as said Schedule 5.1 may be supplemented from time to time
pursuant to the provisions of subsection 6.1(xv). The Equity Interests of each
of the Subsidiaries of Holdings identified in Schedule 5.1 annexed hereto (as so
supplemented) is duly authorized, validly issued, fully paid and nonassessable
and none of such Equity Interests constitutes Margin Stock. Each of the
Subsidiaries of Holdings identified in Schedule 5.1 annexed hereto (as so
supplemented) is a corporation, partnership, trust or limited liability company
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such power and authority has not had and could not reasonably be expected to
result in a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
supplemented) correctly sets forth, as of the Effective Date, the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.

     5.2  AUTHORIZATION OF BORROWING, ETC.

     A. AUTHORIZATION OF BORROWING. The execution, delivery and performance of
the Loan Documents have been duly authorized by all necessary action on the part
of each Loan Party that is a party thereto.

     B. NO CONFLICT. The execution, delivery and performance by Loan Parties of
the Loan Documents to which they are parties and the consummation of the
transactions contemplated by the Loan Documents do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, the Organizational Documents of Holdings or
any of its Subsidiaries or any order, judgment or decree of any court or other
Government Authority binding on Holdings or any of its 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 or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Collateral Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Effective Date and except, in
each case, to the extent such violation, conflict, Lien or failure to obtain
such approval or consent could not reasonably be expected either individually or
in the aggregate to result in a Material Adverse Effect.

     C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the


                                       86



transactions contemplated by the Loan Documents do not and will not require any
Governmental Authorizations or notice to, or other action to, with or by, any
Government Authority or registration, consent or approval or other action under
any Healthcare Regulations, except for such Governmental Authorizations,
registrations, consents, approvals or notices which will be obtained or taken on
or before the Effective Date and the failure to obtain could not reasonably be
expected either individually or in the aggregate to result in a Material Adverse
Effect.

     D. BINDING OBLIGATION. Each of the Loan Documents has been duly executed
and delivered by each Loan Party that is a party thereto and is the legally
valid and binding obligation of such Loan Party, enforceable against such Loan
Party in accordance with its 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.

     E. HEALTHCARE AUTHORIZATIONS. Except in each case as is not reasonably
likely to have, either individually or in the aggregate, a Material Adverse
Effect, all Healthcare Authorizations have been duly obtained and are in full
force and effect without any known conflict with the rights of others and free
from any restrictions. Except in each case as is not reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect and none of
Holdings or any of its Subsidiaries has received any written notice or other
written communications from any Government Authority regarding (i) any
revocation, withdrawal, suspension, termination or modification of, or the
imposition of any material conditions with respect to, any Healthcare
Authorizations, (ii) any violation by Holdings or any of its Subsidiaries of any
applicable Law (including any Environmental Law or Healthcare Regulation) or
(iii) any other limitations on the conduct of business by Company or any of its
Subsidiaries.

     F. VALID ISSUANCE OF HOLDINGS COMMON STOCK, HOLDINGS PREFERRED STOCK,
SENIOR SUBORDINATED NOTES; BRIDGE FACILITY.

          (i) Holdings Common Stock and Holdings Preferred Stock. The Holdings
     Common Stock and Holdings Preferred Stock to be sold on or before the
     Effective Date, when issued and delivered, will be duly and validly issued,
     fully paid and nonassessable. The issuance and sale of such Holdings Common
     Stock and Holdings Preferred Stock, upon such issuance and sale, will
     either (a) have been registered or qualified under applicable federal and
     state securities laws or (b) be exempt therefrom.

          (ii) Senior Subordinated Notes. This subsection 5.2F(ii) applies only
     if Company issues the Senior Subordinated Notes as of the Effective Date.
     Company has the corporate power and authority to issue the Senior
     Subordinated Notes. The Senior Subordinated Notes, when issued and paid
     for, will be legally valid and binding obligations of Company, enforceable
     against Company in accordance with their respective terms, except as may be
     limited by bankruptcy, insolvency, reorganization, moratorium or similar
     laws relating to or limiting credits' rights generally or by equitable
     principles relating to enforceability. The Loans and all other monetary
     Obligations hereunder are and will be within the definition of "Senior
     Indebtedness" as such term is defined in the Senior Subordinated Note
     Indenture. The Senior Subordinated Notes,


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     when issued and sold, will either (a) have been registered or qualified
     under applicable federal and state securities laws or (b) be exempt
     therefrom.

          (iii) Bridge Facility. This subsection 5.2F(iii) applies only if
     Company executes the Bridge Loan Agreement as of the Effective Date.
     Company has requisite power and authority to enter into the Bridge
     Facility. The Bridge Facility is a legally valid and binding obligation of
     Company, enforceable against Company in accordance with its terms, except
     as may be limited by bankruptcy, insolvency, reorganization, moratorium or
     similar laws relating to or limiting credits' rights generally or by
     equitable principles relating to enforceability. The Loans and all other
     monetary Obligations hereunder are and will be within the definition of
     "Senior Indebtedness" as such term is defined in the Bridge Loan Agreement.

     5.3  FINANCIAL CONDITION.

          All financial statements delivered pursuant to subsection 4.1E(i)
other than pro forma financial statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Neither Company
nor any of its Subsidiaries has (and will not have following the funding of the
initial Loans) any Contingent Obligation, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that, as of
the Effective Date, is not reflected in the foregoing financial statements or
the notes thereto and, as of any Funding Date subsequent to the Effective Date,
is not reflected in the most recent financial statements delivered to Lenders
pursuant to subsection 6.1 or the notes thereto and that, in any such case, is
material in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries.

     5.4  NO MATERIAL ADVERSE EFFECT; NO RESTRICTED JUNIOR PAYMENTS.

          Since December 31, 2004, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Neither Holdings nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 7.5.

     5.5  TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL PROPERTY.

     A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of


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such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.

     B. REAL PROPERTY. As of the Effective Date, Schedule 5.5B annexed hereto
contains a true, accurate and complete list of (i) all fee interests in any Real
Property Assets and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset, regardless of
whether a Loan Party is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in Schedule 5.5B annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any material default that has occurred
and is continuing thereunder, and each such agreement constitutes the legally
valid and binding obligation of each applicable Loan Party, enforceable against
such Loan Party in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.

     C. INTELLECTUAL PROPERTY. As of the Effective Date, Company and its
Subsidiaries own or have the right to use, all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Company and its Subsidiaries
does not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. All federal, state and foreign registrations of
and applications for Intellectual Property, and all unregistered Intellectual
Property, that are owned or licensed by Company or any of its Subsidiaries on
the Effective Date are described on Schedule 5.5C annexed hereto.

     5.6  LITIGATION; ADVERSE FACTS.

          Except as set forth in Schedule 5.6 annexed hereto, there are no
Proceedings (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, before or by any court or other Government
Authority (including any Environmental Claims) that are pending or, to the
knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any Healthcare Authorizations or any applicable Laws (including
Environmental Laws and Healthcare Regulations) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or other Government
Authority, that,


                                       89



individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

     5.7  PAYMENT OF TAXES.

          Except to the extent permitted by subsection 6.3, all material Tax
returns and reports of Holdings and its Subsidiaries required to be filed by any
of them have been timely filed, and all Taxes shown on such Tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Holdings and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises that are due and payable have been paid when
due and payable. Company knows of no proposed tax assessment against Holdings or
any of its Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect and is not being actively contested by Holdings or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.

     5.8  PERFORMANCE OF AGREEMENTS.

          Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to result in
a Material Adverse Effect.

     5.9  GOVERNMENTAL REGULATION.

          Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.

     5.10 SECURITIES ACTIVITIES.

     A. Neither Company nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.

     B. Following application of the proceeds of each Loan, not more than 25% of
the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.


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     5.11 EMPLOYEE BENEFIT PLANS.

     A. Company and each of its Subsidiaries are in compliance in all material
respects with all applicable provisions and requirements of ERISA and the
regulations thereunder with respect to each Employee Benefit Plan (other than a
Multiemployer Plan), and have performed all their obligations in all material
respects under each Employee Benefit Plan. Each Employee Benefit Plan (other
than a Multiemployer Plan) that is intended to qualify under Section 401(a) of
the Internal Revenue Code is so qualified.

     B. No ERISA Event has occurred or is reasonably expected to occur.

     C. Except to the extent required under Section 4980B of the Internal
Revenue Code or other applicable Law, or except as set forth in Schedule 5.11
annexed hereto, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company or any of its Subsidiaries.

     D. As of the date of the most recent actuarial valuation for any Pension
Plan, the amount equal to the accrued liability, less the actuarial value of
assets, of such Pension Plan (in each case, as determined under such actuarial
valuation for funding purposes), individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans with
respect to which the actuarial value of assets exceeds the accrued liability, as
so determined), does not exceed $7,500,000.

     E. As of the date of the most recent actuarial valuation for each
Multiemployer Plan for which the actuarial report is available, the potential
withdrawal liability of Company, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential
withdrawal liability for a complete withdrawal from all Multiemployer Plans,
based on information available pursuant to Section 4221(e) of ERISA, does not
exceed $7,500,000.

     5.12 CERTAIN FEES.

          Except for fees referred to in subsection 2.3B, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.

     5.13 ENVIRONMENTAL PROTECTION.

          Except as set forth in Schedule 5.13 annexed hereto:

          (i) neither Company nor any of its Subsidiaries nor any of their
     respective Facilities or operations are subject to any outstanding written
     order, consent decree or


                                       91



     settlement agreement with any Person relating to (a) any Environmental Law,
     (b) any Environmental Claim, or (c) any Hazardous Materials Activity;

          (ii) neither Company nor any of its Subsidiaries has received any
     letter or request for information under Section 104 of the Comprehensive
     Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
     9604) or any comparable state law;

          (iii) there are and, to Company's knowledge, have been no conditions,
     occurrences, or Hazardous Materials Activities that could reasonably be
     expected to form the basis of an Environmental Claim against Company or any
     of its Subsidiaries;

          (iv) neither Company nor any of its Subsidiaries nor, to Company's
     knowledge, any predecessor of Company or any of its Subsidiaries has filed
     any notice under any Environmental Law indicating past or present treatment
     or disposal of Hazardous Materials at any Facility, and none of Company's
     or any of its Subsidiaries' operations involves the generation,
     transportation, treatment, storage or disposal of hazardous waste, as
     defined under 40 C.F.R. Parts 260-270 or any state equivalent except in the
     ordinary course of business and in compliance with applicable law;

          (v) compliance with all current or reasonably foreseeable future
     requirements pursuant to or under Environmental Laws would not,
     individually or in the aggregate, be reasonably expected to result in a
     Material Adverse Effect.

     5.14 EMPLOYEE MATTERS.

          There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.

     5.15 SOLVENCY.

          Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.

     5.16 MATTERS RELATING TO COLLATERAL.

     A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
to date pursuant to subsections 4.1L, 4.1M, 6.8 and 6.9 of the Existing First
Lien Credit Agreement and subsections 4.1J, 6.8 and 6.9 hereof and (ii) the
delivery to Collateral Agent of any Pledged Collateral not delivered to
Collateral Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral has been so delivered) are
effective to create or to continue in favor of Collateral Agent for the benefit
of Lenders, as security for the respective Secured Obligations (as defined in
the applicable Collateral Document in respect of any Collateral), a valid First
Priority Lien on all of the Collateral (except as


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indicated in the applicable Collateral Document), and all filings and other
actions necessary or desirable to perfect and maintain the perfection and First
Priority status of such Liens have been duly made or taken and remain in full
force and effect, other than the filing of any UCC financing statements and PTO
filings delivered to Collateral Agent on the Closing Date for filing (but not
yet filed) and the periodic filing of UCC continuation statements in respect of
UCC financing statements filed by or on behalf of Collateral Agent.

     B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other action
by, and no notice to or filing with, any Government Authority is required for
either (i) the pledge or grant by any Loan Party of the Liens purported to be
created in favor of Collateral Agent pursuant to any of the Collateral Documents
or (ii) the exercise by Administrative Agent or Collateral Agent of any rights
or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by the
Collateral Documents and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.

     C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of Collateral Agent as contemplated by the Collateral Documents and to
evidence permitted lease obligations and other Liens permitted pursuant to
subsection 7.2, (i) no effective UCC financing statement, fixture filing or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office and (ii) no effective filing covering
all or any part of the IP Collateral is on file in any IP Filing Office.

     D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to the
Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.

     E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent or Collateral Agent by or on behalf of any Loan Party with
respect to any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material respects.

     F. ACCOUNTS. The Accounts of Company and its Subsidiaries represent sales
actually made in the ordinary course of business, and are, in all material
respects, current and fully collectible net of reserves shown on the financial
statements delivered to Administrative Agent pursuant to subsection 4.1E (which
reserves are adequate and were calculated on a basis consistent with GAAP and
past practices). The Accounts have, in all material respects, been appropriately
adjusted to reflect current reimbursement policies of Government Reimbursement
Programs and Nongovernmental Payors. The Accounts, adjusted as set forth above,
relating to third party payors, do not exceed in any material respects amounts
Company reasonably believes it or a Subsidiary is entitled to receive, under any
capitalization arrangement, fee schedule, discount formula, cost based
reimbursement or other adjustment or limitation to the usual charges of Company
and its Subsidiaries.


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     5.17 DISCLOSURE.

          No representation or warranty of Holdings or any of its Subsidiaries
contained in the Confidential Information Memorandum, in any Loan Document,
Related Agreement or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document or information not furnished by it)
necessary in order to make the statements contained herein or therein not
materially misleading in light of the circumstances in which the same were made.
Any projections and pro forma financial information contained in such materials
are based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results.

     5.18 SUBORDINATED INDEBTEDNESS.

          The Obligations constitute senior indebtedness that is entitled to the
benefits of the subordination provisions, if any, of all Subordinated
Indebtedness.

     5.19 REPORTING TO IRS.

          Company does not intend to treat the Loans and related transactions as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). In the event Company determines to take any action
inconsistent with such intention, it will promptly notify Administrative Agent
thereof.

          Company acknowledges that one or more Lenders may treat their Loans as
part of a transaction that is subject to Treasury Regulation Section 1.6011-4 or
Section 301.6112-1, and Administrative Agent and such Lender or Lenders, as
applicable, may file such IRS forms or maintain such lists and other records as
they may determine is required by such Treasury Regulations.

     5.20 HEALTHCARE MATTERS.

          Company and each of its Subsidiaries has developed and implemented a
Compliance Program. Neither Company nor any of its Subsidiaries (i) is a party
to a corporate integrity agreement, (ii) has reporting obligations pursuant to a
settlement agreement entered into with a Governmental Authority, (iii) to
Company's best knowledge, has been the subject of any investigation conducted by
any federal or state enforcement agency, (iv) to Company's best knowledge, has
been a defendant in any qui tam/false claims act litigation and (v) has been
served with or received any written search warrant, subpoena, civil
investigative demand or contact letter from any federal or state enforcement
agency, except in each case where such event or circumstance could not
reasonably be expected to have Material Adverse Effect.


                                       94



     5.21 REIMBURSEMENT; NONGOVERNMENTAL PAYORS.

     A. The healthcare Facilities operated by Company and its Subsidiaries and
the services provided at such Facilities are qualified for participation in the
Government Reimbursement Programs, and Company and its Subsidiaries are entitled
to reimbursement under the Government Reimbursement Programs for services
rendered to qualified beneficiaries, and Company and its Subsidiaries and the
healthcare Facilities operated by Company and its Subsidiaries comply in all
material respects with the conditions of participation in all Government
Reimbursement Programs and related contracts. Company and its Subsidiaries are
in compliance in all material respects with contracts with Nongovernmental
Payors and are entitled to reimbursement under such contracts.

     B. With respect to Government Reimbursement Programs and contracts with
Nongovernmental Payors, (i) no notice of any offsets against future
reimbursement has been received by Company or any of its Subsidiaries, nor to
the knowledge of Company, is there any reasonable basis therefor, except with
respect to offsets in the ordinary course of business that could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (ii) there are no pending appeals, adjustments, challenges,
audits, litigation, notices of intent to reopen or open completed payments
and/or cost reports, except such adjustments made in the ordinary course of
business that could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, and (iii) neither Company nor
any of its Subsidiaries has received notice of pending, threatened or possible
suspension, exclusion, decertification or other loss of participation which
could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

     5.22 FOREIGN ASSETS CONTROL REGULATIONS, ETC.

          Neither the making of the Loans to, or issuance of a Letter of Credit
on behalf of, Company nor its use of the proceeds thereof will violate in any
material respect the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto. Without limiting the foregoing, neither Company nor any
of its Subsidiaries or Affiliates (a) is or will become a Person whose property
or interests in property are blocked pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) or (b) to its knowledge engages or will engage in any dealings or
transactions, or be otherwise associated, with any such Person. Company and its
Subsidiaries and Affiliates are in compliance, in all material respects, with
the Uniting And Strengthening America By Providing Appropriate Tools Required To
Intercept And Obstruct Terrorism (USA Patriot Act of 2001).

     5.23 RELATED AGREEMENTS.

     A. DELIVERY OF RELATED AGREEMENTS. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.


                                       95



     B. COMPANY'S WARRANTIES. Except to the extent otherwise set forth herein or
in the schedules hereto, each of the representations and warranties given by
Company in the Acquisition Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Effective Date (or as of such earlier date,
as the case may be), in each case subject to the qualifications set forth in the
schedules to the Acquisition Agreement.

     C. WARRANTIES OF HOLDINGS AND MERGER SUB. Subject to the qualifications set
forth therein, each of the representations and warranties given by Holdings and
Merger Sub in the Acquisition Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Effective Date (or as of such earlier date,
as the case may be).

     D. SURVIVAL. Notwithstanding anything in the Acquisition Agreement to the
contrary, the representations and warranties of Company set forth in subsections
5.23B and 5.23C shall, solely for purposes of this Agreement, survive the
Effective Date for the benefit of Lenders.

SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS

          Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations (other than Unasserted Obligations) and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.

     6.1  FINANCIAL STATEMENTS AND OTHER REPORTS.

          Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent:

          (i) Events of Default, etc.: promptly upon any officer of Company
     obtaining knowledge (a) of any condition or event that constitutes an Event
     of Default or Potential Event of Default, (b) that any Person has given any
     notice to Company or any of its Subsidiaries or taken any other action with
     respect to a claimed default or event or condition of the type referred to
     in subsection 8.2, (c) of any condition or event that would be required to
     be disclosed in a current report filed by Company with the Securities and
     Exchange Commission on Form 8-K if Company were required to file such
     reports under the Exchange Act, or (d) of the occurrence of any event or
     change that has caused or evidences, either in any case or in the
     aggregate, a Material Adverse Effect, an Officer's Certificate specifying
     the nature and period of existence of such condition, event or change, or
     specifying the notice given or action taken by any such Person and


                                       96



     the nature of such claimed Event of Default, Potential Event of Default,
     default, event or condition, and what action Company has taken, is taking
     and proposes to take with respect thereto;

          (ii) Monthly Financials: as soon as available and in any event within
     30 days after the end of the first two months of each Fiscal Quarter the
     consolidated balance sheet of Company and its Subsidiaries as at the end of
     such fiscal period and the related consolidated statements of income and
     cash flows of Company and its Subsidiaries for such fiscal period and for
     the period from the beginning of the then current Fiscal Year to the end of
     such fiscal period, setting forth in each case in comparative form the
     corresponding figures for the corresponding periods of the previous Fiscal
     Year and the corresponding figures from the Financial Plan for the current
     Fiscal Year, to the extent prepared for such fiscal period, all in
     reasonable detail and certified by the chief financial officer, controller
     or treasurer of Company that they fairly present, in all material respects,
     the financial condition of Company and its Subsidiaries as at the dates
     indicated and the results of their operations and their cash flows for the
     periods indicated, subject to changes resulting from audit and normal
     year-end adjustments;

          (iii) Quarterly Financials: as soon as available and in any event
     within 45 days after the end of each of the first three Fiscal Quarters of
     each Fiscal Year, (a) the consolidated balance sheet of Company and its
     Subsidiaries as at the end of such Fiscal Quarter and the related
     consolidated statements of income and cash flows of Company and its
     Subsidiaries for such Fiscal Quarter and for the period from the beginning
     of the then current Fiscal Year to the end of such Fiscal Quarter, setting
     forth in each case in comparative form the corresponding figures for the
     corresponding periods of the previous Fiscal Year and the corresponding
     figures from the Financial Plan for the current Fiscal Year, to the extent
     prepared for such Fiscal Quarter, all in reasonable detail and certified by
     the chief financial officer, controller or treasurer of Company that they
     fairly present, in all material respects, the financial condition of
     Company and its Subsidiaries as at the dates indicated and the results of
     their operations and their cash flows for the periods indicated, subject to
     changes resulting from audit and normal year-end adjustments, and (b) a
     narrative report describing the operations of Company and its Subsidiaries
     in the form prepared for presentation to senior management for such Fiscal
     Quarter and for the period from the beginning of the then current Fiscal
     Year to the end of such Fiscal Quarter;

          (iv) Year-End Financials: as soon as available and in any event within
     90 days after the end of each Fiscal Year, (a) the consolidated balance
     sheet of Company and its Subsidiaries as at the end of such Fiscal Year and
     the related consolidated statements of income, stockholders' equity and
     cash flows of Company and its Subsidiaries for such Fiscal Year, setting
     forth in each case in comparative form the corresponding figures for the
     previous Fiscal Year and the corresponding figures from the Financial Plan
     for the Fiscal Year covered by such financial statements, all in reasonable
     detail and certified by the chief financial officer, controller or
     treasurer of Company that they fairly present, in all material respects,
     the financial condition of Company and its Subsidiaries as at the dates
     indicated and the results of their operations and their cash flows for the
     periods


                                       97



     indicated, (b) a narrative report describing the operations of Company and
     its Subsidiaries in the form prepared for presentation to senior management
     for such Fiscal Year, and (c) in the case of such consolidated financial
     statements, a report thereon of Ernst & Young LLP or other independent
     certified public accountants of recognized national standing selected by
     Company and reasonably satisfactory to Administrative Agent, which report
     shall be unqualified as to scope and, shall express no doubts, assumptions
     or qualifications concerning the ability of Company and its Subsidiaries to
     continue as a going concern, and shall state that such consolidated
     financial statements fairly present, in all material respects, the
     consolidated financial position of Company and its Subsidiaries as at the
     dates indicated and the results of their operations and their cash flows
     for the periods indicated in conformity with GAAP applied on a basis
     consistent with prior years (except as otherwise disclosed in such
     financial statements) and that the examination by such accountants in
     connection with such consolidated financial statements has been made in
     accordance with generally accepted auditing standards;

          (v) Pricing and Compliance Certificates: together with each delivery
     of financial statements pursuant to subdivisions (iii) and (iv) above, (a)
     an Officer's Certificate of Company stating that the signers have reviewed
     the terms of this Agreement and have made, or caused to be made under their
     supervision, a review in reasonable detail of the transactions and
     condition of Company and its Subsidiaries during the accounting period
     covered by such financial statements and that such review has not disclosed
     the existence during or at the end of such accounting period, and that the
     signers do not have knowledge of the existence as at the date of such
     Officer's Certificate, of any condition or event that constitutes an Event
     of Default or Potential Event of Default, or, if any such condition or
     event existed or exists, specifying the nature and period of existence
     thereof and what action Company has taken, is taking and proposes to take
     with respect thereto; and (b) a Compliance Certificate demonstrating in
     reasonable detail compliance during and at the end of the applicable
     accounting periods with the restrictions contained in Section 7, in each
     case to the extent compliance with such restrictions is required to be
     tested at the end of the applicable accounting period; in addition, on or
     before the 45th day following the end of each Fiscal Quarter, a Pricing
     Certificate demonstrating in reasonable detail the calculation of the
     Consolidated Leverage Ratio as of the end of the four-Fiscal Quarter period
     then ended;

          (vi) Reconciliation Statements: if, as a result of any change in
     accounting principles and policies from those used in the preparation of
     the audited financial statements referred to in subsection 5.3, the
     consolidated financial statements of Company and its Subsidiaries delivered
     pursuant to subdivisions (ii), (iii), (iv) or (xiii) of this subsection 6.1
     will differ in any material respect from the consolidated financial
     statements that would have been delivered pursuant to such subdivisions had
     no such change in accounting principles and policies been made, then, if
     requested by Administrative Agent (a) together with the first delivery of
     financial statements pursuant to subdivision (iii), (iv) or (xiii) of this
     subsection 6.1 following such change, consolidated financial statements of
     Company and its Subsidiaries for (y) the current Fiscal Year to the
     effective date of such change and (z) the two full Fiscal Years


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     immediately preceding the Fiscal Year in which such change is made, in each
     case prepared on a pro forma basis as if such change had been in effect
     during such periods, and (b) together with each delivery of financial
     statements pursuant to subdivision (ii), (iii), (iv) or (xiii) of this
     subsection 6.1 following such change, if required pursuant to subsection
     1.2, a written statement of the chief accounting officer, chief financial
     officer, controller or treasurer of Company setting forth the differences
     (including any differences that would affect any calculations relating to
     the financial covenants set forth in subsection 7.6) which would have
     resulted if such financial statements had been prepared without giving
     effect to such change;

          (vii) Accountants' Certification: together with each delivery of
     consolidated financial statements pursuant to subdivision (iv) above, a
     written statement by the independent certified public accountants giving
     the report thereon (a) stating whether, in connection with their audit
     examination, any condition or event that constitutes an Event of Default or
     Potential Event of Default has come to their attention and, if such a
     condition or event has come to their attention, specifying the nature and
     period of existence thereof; provided that such accountants shall not be
     liable by reason of any failure to obtain knowledge of any such Event of
     Default or Potential Event of Default that would not be disclosed in the
     course of their audit examination, and (b) stating that based on their
     audit examination nothing has come to their attention that causes them to
     believe either or both that the information contained in the certificates
     delivered therewith pursuant to subdivision (v) above is not correct or
     that the matters set forth in the Compliance Certificates delivered
     therewith pursuant to clause (b) of subdivision (v) above for the
     applicable Fiscal Year are not stated in accordance with the terms of this
     Agreement;

          (viii) Accountants' Reports: promptly upon receipt thereof (unless
     restricted by applicable professional standards), copies of all reports
     submitted to Company by independent certified public accountants in
     connection with each annual, interim or special audit of the financial
     statements of Company and its Subsidiaries made by such accountants,
     including any comment letter submitted by such accountants to management in
     connection with their annual audit;

          (ix) SEC Filings and Press Releases: promptly upon their becoming
     available, copies of (a) all financial statements, reports, notices and
     proxy statements sent or made available generally by Company to its
     security holders or by any Subsidiary of Company to its security holders
     other than Company or another Subsidiary of Company, (b) all regular and
     periodic reports and all registration statements (other than on Form S-8 or
     a similar form) and prospectuses, if any, filed by Company or any of its
     Subsidiaries with any securities exchange or with the Securities and
     Exchange Commission or any governmental or private regulatory authority,
     and (c) all press releases and other statements made available generally by
     Company or any of its Subsidiaries to the public concerning material
     developments in the business of Company or any of its Subsidiaries;

          (x) Litigation or Other Proceedings: (a) promptly upon any Officer of
     Company obtaining knowledge of (X) the institution of, or non-frivolous
     threat of, any


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     Proceeding against or affecting Company or any of its Subsidiaries or any
     property of Company or any of its Subsidiaries not previously disclosed in
     writing by Company to Lenders that, or (Y) any development in any
     Proceeding that, in any case could reasonably be expected to result in a
     Material Adverse Effect and:

               (1) with respect to (A) Company's or any of its Subsidiaries'
          qualification or right to participate in any Government Reimbursement
          Program, (B) the compliance or non-compliance by Company or any of its
          Subsidiaries with the terms or provisions of any Government
          Reimbursement Program or any contract with Nongovernmental Payor or
          (C) the right of Company or any of its Subsidiaries to receive or
          retain amounts received or due or to become due from any Government
          Reimbursement Programs or any Nongovernmental Payor, together with all
          other such Proceedings, has a reasonable possibility of giving rise to
          a Material Adverse Effect; or

               (2) with respect to any other matter which has a reasonable
          possibility after giving effect to the coverage and policy limits of
          insurance policies issued to Company and its Subsidiaries of giving
          rise to a Material Adverse Effect; or

               (3) seeks to enjoin or otherwise prevent the consummation of, or
          to recover any damages or obtain relief as a result of, the
          transactions contemplated hereby;

     written notice thereof together with such other information as may be
     reasonably available to Company to enable Lenders and their counsel to
     evaluate such matters;

          (xi) ERISA Events: promptly upon becoming aware of the occurrence of
     or forthcoming occurrence of any ERISA Event, a written notice specifying
     the nature thereof, what action Company, any of its Subsidiaries or any of
     their respective ERISA Affiliates has taken, is taking or proposes to take
     with respect thereto and, when known, any action taken or threatened by the
     Internal Revenue Service, the Department of Labor or the PBGC with respect
     thereto;

          (xii) ERISA Notices: with reasonable promptness, copies of (a) all
     notices received by Company, any of its Subsidiaries or any of their
     respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an
     ERISA Event; and (b) copies of such other documents or governmental reports
     or filings relating to any Employee Benefit Plan as Administrative Agent
     shall reasonably request;

          (xiii) Financial Plans: as soon as practicable and in any event no
     later than 90 days after the beginning of each Fiscal Year, a consolidated
     plan and financial forecast for such Fiscal Year (the "FINANCIAL PLAN" for
     such Fiscal Year), including (a) a forecasted consolidated balance sheet
     and forecasted consolidated statements of income and cash flows of Company
     and its Subsidiaries for each such Fiscal Year, together with a pro forma
     Compliance Certificate for each such Fiscal Year and an explanation of the
     assumptions on which such forecasts are based, (b) forecasted consolidated
     statements of


                                      100



     income and cash flows of Company and its Subsidiaries for each month of
     each such Fiscal Year, together with an explanation of the assumptions on
     which such forecasts are based, (c) the amount of forecasted unallocated
     overhead for each such Fiscal Year, and (d) such other information and
     projections as Administrative Agent may reasonably request;

          (xiv) Insurance: as soon as practicable after any material change in
     insurance coverage maintained by Company and its Subsidiaries notice
     thereof to Administrative Agent specifying the changes and reasons
     therefor;

          (xv) New Subsidiaries: promptly upon any Person becoming a Subsidiary
     of Company, a written notice setting forth with respect to such Person (a)
     the date on which such Person became a Subsidiary of Company and (b) all of
     the data required to be set forth in Schedule 5.1 annexed hereto with
     respect to all Subsidiaries of Company (it being understood that such
     written notice shall be deemed to supplement Schedule 5.1 annexed hereto
     for all purposes of this Agreement);

          (xvi) Healthcare Compliance: Promptly upon any Officer of Company
     obtaining knowledge of (a) any material claim, audit or complaint received
     by Company or any of its Subsidiaries (excluding malpractice claims,
     routine or random audits and routine license and certification surveys,
     unless such surveys include a recommendation that the Government
     Reimbursement Program certification or license of a Facility should be
     terminated, revoked or suspended) by or on behalf of a Government
     Reimbursement Program, other Government Authority or a Nongovernmental
     Payor relating to the delivery of medical services and payment therefor or
     billing procedures, or (b) the suspension, termination, revocation,
     decertification, or restriction or proposed suspension, termination,
     revocation, decertification or restriction of any Healthcare Authorization
     by any Government Authority which could reasonably be expected to result in
     a Material Adverse Effect;

          (xvii) Patriot Act, etc.: with reasonable promptness, information to
     confirm compliance with the representations contained in subsection 5.22
     reasonably requested by any Lender through Administrative Agent; and

          (xviii) Other Information: with reasonable promptness, such other
     information and data with respect to Company or any of its Subsidiaries as
     from time to time may be reasonably requested by any Lender.

          Information required to be delivered pursuant to subdivisions (ii)(a),
(iii)(a), (iv)(a), (iv)(c) and (ix) of this subsection 6.1 shall be deemed to
have been delivered on the date on which Company provides notice to Lenders that
such information has been posted on Company's Internet website at the website
address listed on the signature page hereof or at another website identified in
such notice and accessible to Lenders without charge; provided that Company
shall deliver paper copies of such information to any Lender that requests such
delivery.


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     6.2  EXISTENCE, HEALTHCARE AUTHORIZATIONS, ETC.

          Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times (i) preserve and keep in full force
and effect its existence in the jurisdiction of organization specified on
Schedule 5.1 and all rights and franchises material to its business and (ii)
maintain and keep in full force and effect its Healthcare Authorizations
material to its business; provided, however that neither Company nor any of its
Subsidiaries shall be required to preserve or maintain any such right, franchise
or Healthcare Authorization if the Governing Body of Company or such Subsidiary
shall determine that the preservation or maintenance thereof is not longer
desirable in the conduct of the business of Company or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any material
respect to Company, such Subsidiary or Lenders.

     6.3  PAYMENT OF TAXES AND CLAIMS; TAX.

     A. Holdings will, and will cause each of its Subsidiaries to, pay all
material Taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all material claims
(including material claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such Tax, assessment,
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(i) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (ii) in the case of a
Tax, assessment, charge or claim which has or may become a Lien against any of
the Collateral, such proceedings conclusively operate to stay the sale of any
portion of the Collateral to satisfy such charge or claim.

     B. Holdings will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income Tax return with any Person
(other than Holdings or any of its Subsidiaries).

     6.4  MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
          CONDEMNATION PROCEEDS.

     A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.

     B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its


                                      102


Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for business entities similarly situated in the industry.
Without limiting the generality of the foregoing, Company will maintain or cause
to be maintained (i) flood insurance with respect to each Flood Hazard Property
that is located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the Board
of Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance shall (a) name
Collateral Agent for the benefit of Lenders as an additional insured thereunder
as its interests may appear and (b) in the case of each business interruption
and casualty insurance policy, contain a loss payable clause or endorsement,
reasonably satisfactory in form and substance to Administrative Agent, that
names Collateral Agent for the benefit of Lenders as the loss payee thereunder
for any covered loss in excess of $1,000,000 and (c) provide for at least 30
days prior written notice to Administrative Agent of any modification or
cancellation of such policy.

     C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.

          (i) Business Interruption Insurance. Upon receipt by Company or any of
     its Subsidiaries of any business interruption insurance proceeds, Company
     or such Subsidiary may retain and apply such business interruption proceeds
     for general corporate purposes. Upon receipt by Administrative Agent of any
     business interruption insurance proceeds, so long as no Event of Default or
     Potential Event of Default shall have occurred and be continuing,
     Administrative Agent shall turnover such proceeds to Company to use for
     general corporate purposes.

          (ii) Other Net Insurance/Condemnation Proceeds. Upon receipt by
     Company or any of its Subsidiaries or by Administrative Agent as loss payee
     of any Net Insurance/Condemnation Proceeds other than from business
     interruption insurance:

               (a) so long as no Event of Default or Potential Event of Default
          shall have occurred and be continuing, Administrative Agent, if it
          received such Net Insurance/Condemnation Proceeds, shall deliver them
          to Company, and Company shall, or shall cause one or more of its
          Subsidiaries to, promptly and diligently apply any such Net
          Insurance/Condemnation Proceeds to pay or reimburse the costs of
          repairing, restoring or replacing (including replacing such assets by
          investing in a different geographical area) the assets in respect of
          which such Net Insurance/Condemnation Proceeds were received or, to
          the extent not so applied, to prepay the Loans as provided in
          subsection 2.4B; and

               (b) if at any time (1) an Event of Default or Potential Event of
          Default shall have occurred and be continuing or (2) Administrative
          Agent reasonably determines (A) that Company or such Subsidiary is not
          proceeding diligently with


                                      103



          such repair, restoration or replacement, (B) that such repair,
          restoration or replacement cannot be completed with the Net
          Insurance/Condemnation Proceeds, together with funds otherwise
          available to Company for such purpose, or (C) that such repair,
          restoration or replacement cannot be completed within 270 days after
          the receipt by Company and/or Administrative Agent of such Net
          Insurance/Condemnation Proceeds, Administrative Agent, if it holds
          such Net Insurance/Condemnation Proceeds, is hereby authorized by
          Company to, and Company, if it or one of its Subsidiaries holds such
          Net Insurance/Condemnation Proceeds, shall, apply such Net
          Insurance/Condemnation Proceeds to prepay the Loans as provided in
          subsection 2.4B and subsection 2.4D.

     6.5  INSPECTION RIGHTS; LENDER MEETING.

     A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender,
at the expense of such Lender, to visit and inspect any of the properties of
Company or of any of its Subsidiaries, to inspect, copy and take extracts from
its and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses, be present at
or participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested or at any time or from time to time following the occurrence and
during the continuation of an Event of Default.

     B. LENDER MEETING. Company will, upon the request of Administrative Agent
or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's principal offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.

     6.6  COMPLIANCE WITH LAWS, ETC.

          Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable Laws (including all Environmental Laws and Healthcare
Regulations), noncompliance with which could reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect.

     6.7  ENVIRONMENTAL MATTERS.

     A. ENVIRONMENTAL DISCLOSURE. Company will deliver to Administrative Agent:

          (i) Environmental Audits and Reports. As soon as practicable following
     receipt thereof by Company or any of its Subsidiaries, copies of all
     environmental audits, investigations, analyses and reports of any kind or
     character, whether prepared by personnel of Company or any of its
     Subsidiaries or by independent consultants, governmental authorities or any
     other Persons, with respect to significant environmental


                                      104



     matters at any Facility that, individually or in the aggregate, could
     reasonably be expected to result in a Material Adverse Effect or with
     respect to any Environmental Claims that, individually or in the aggregate,
     could reasonably be expected to result in a Material Adverse Effect.

          (ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
     the occurrence thereof, written notice describing in reasonable detail (a)
     any Release required to be reported to any federal, state or local
     governmental or regulatory agency under any applicable Environmental Laws
     and (b) any remedial action taken by Company or any other Person in
     response to (1) any Hazardous Materials Activities the existence of which
     could reasonably be expected to result in one or more Environmental Claims
     having, individually or in the aggregate, a Material Adverse Effect, or (2)
     any Environmental Claims that, individually or in the aggregate, could
     reasonably be expected to result in a Material Adverse Effect.

          (iii) Written Communications Regarding Environmental Claims, Releases,
     Etc. As soon as practicable following the sending or receipt thereof by
     Company or any of its Subsidiaries, a copy of any and all written
     communications with respect to (a) any Environmental Claims that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect, (b) any Release required to be reported to any
     federal, state or local governmental or regulatory agency, and (c) any
     request for information from any governmental agency that suggests such
     agency is investigating whether Company or any of its Subsidiaries may be
     potentially responsible for any Hazardous Materials Activity.

          (iv) Notice of Certain Proposed Actions Having Environmental Impact.
     Prompt written notice describing in reasonable detail (a) any proposed
     acquisition of stock, assets, or property by Company or any of its
     Subsidiaries that could reasonably be expected to (1) expose Company or any
     of its Subsidiaries to, or result in, Environmental Claims that could
     reasonably be expected to result in, individually or in the aggregate, a
     Material Adverse Effect or (2) affect the ability of Company or any of its
     Subsidiaries to maintain in full force and effect all material Governmental
     Authorizations required under any Environmental Laws for their respective
     operations and (b) any proposed action to be taken by Company or any of its
     Subsidiaries to commence manufacturing or other industrial operations or to
     modify current operations in a manner that could reasonably be expected to
     subject Company or any of its Subsidiaries to any additional obligations or
     requirements under any Environmental Laws that could reasonably be expected
     to result in, individually or in the aggregate, a Material Adverse Effect.

     B. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.

          (i) Remedial Actions Relating to Hazardous Materials Activities.
     Company shall, in compliance with all applicable Environmental Laws,
     promptly undertake, and shall cause each of its Subsidiaries promptly to
     undertake, any and all investigations, studies, sampling, testing,
     permitting, abatement, cleanup, removal, remediation or other


                                      105



     response actions necessary to remove, remediate, clean up or abate any
     Hazardous Materials Activity on, under or about any Facility that is in
     violation of any Environmental Laws or that presents a material risk of
     giving rise to an Environmental Claim.

          (ii) Actions with Respect to Environmental Claims and Violations of
     Environmental Laws. Company shall promptly take, and shall cause each of
     its Subsidiaries promptly to take, any and all actions necessary to (i)
     cure any violation of applicable Environmental Laws by Company or its
     Subsidiaries that could reasonably be expected to result in, individually
     or in the aggregate, a Material Adverse Effect and (ii) make an appropriate
     response to any Environmental Claim against Company or any of its
     Subsidiaries and discharge any obligations it may have to any Person
     thereunder where failure to do so could reasonably be expected to result
     in, individually or in the aggregate, a Material Adverse Effect.

     C. PHASE I ENVIRONMENTAL REPORTS ON LEASEHOLD PROPERTIES. Upon the
occurrence and during the continuation of any Event of Default and upon the
request of Administrative Agent, Company shall promptly deliver to
Administrative Agent a Phase I environmental assessment for any Leasehold
Property which is occupied by Company or any of its Subsidiaries and which is
subject to a Mortgage, which assessment (a) conforms to the ASTM Standard
Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process, E 1527, (b) was conducted by one or more environmental
consulting firms reasonably satisfactory to Administrative Agent and (c) is
accompanied by an estimate of the reasonable worst-case cost of investigating
and remediating any Hazardous Materials Activity identified in such Phase I
environmental assessments as giving rise to an actual or potential material
violation of any Environmental Law or as presenting a material risk of giving
rise to a material Environmental Claim.

     6.8  EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
          DOCUMENTS AFTER THE EFFECTIVE DATE.

     A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Domestic Subsidiary Company
after the date hereof, Company will promptly notify Administrative Agent and
Collateral Agent of that fact and (except in the case of a Joint Venture
permitted pursuant to subsection 7.3(xii)) cause such Domestic Subsidiary to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and Security Agreement and to take all such further actions and execute
all such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 4.1J as well as lien
searches, lien terminations, documents filed with any IP Filing Office, and, if
requested by Administrative Agent, opinions of local counsel with respect to the
creation and perfection of any security interests granted in favor of Collateral
Agent and such other matters governed by the laws of the applicable jurisdiction
regarding such security interests as Administrative Agent or Collateral Agent
may reasonably request, in form and substance reasonably satisfactory to
Administrative Agent and Collateral Agent) as may be necessary or, in the
reasonable opinion of Administrative Agent or Collateral Agent, desirable to
create in favor of Collateral Agent, for the benefit of Lenders, a


                                      106



valid and perfected First Priority Lien on all of the personal and mixed
property assets of such Domestic Subsidiary described in the applicable forms of
Collateral Documents. In addition, as provided in the Security Agreement,
Company shall, or shall cause the Subsidiary that owns the Equity Interests of
such Person to, execute and deliver to Collateral Agent a supplement to the
Security Agreement and to deliver to Collateral Agent all certificates
representing such Equity Interests of such Person (accompanied by irrevocable
undated stock powers, duly endorsed in blank).

     B. FOREIGN SUBSIDIARIES. In the event that any Person becomes a Foreign
Subsidiary of Company after the date hereof, Company will promptly notify
Administrative Agent of that fact and, if such Subsidiary is directly owned by
Company or a Domestic Subsidiary, cause such Subsidiary to execute and deliver
to Administrative Agent such documents and instruments and take such further
actions (including actions, documents and instruments comparable to those
described in subsection 4.1J as well as lien searches, lien terminations, pledge
agreements enforceable under local law, and, if requested by Administrative
Agent, opinions of local counsel with respect to the creation and perfection of
any security interests granted in favor of Collateral Agent and such other
matters governed by the laws of the applicable jurisdiction regarding such
security interests as Administrative Agent or Collateral Agent may reasonably
request, in form and substance reasonably satisfactory to Administrative Agent
and Collateral Agent) as may be necessary, or in the reasonable opinion of
Administrative Agent or Collateral Agent, desirable to create in favor of
Collateral Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien on 65% of the Equity Interests of such Foreign Subsidiary. To the
extent no adverse tax consequences to Company would result therefrom, Company
shall comply with subsection 6.8A with respect to any Person which becomes a
Foreign Subsidiary of Company after the date hereof as if it were a Domestic
Subsidiary.

     C. SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Organizational Documents, together with,
if such Subsidiary is a Domestic Subsidiary, a good standing certificate from
the Secretary of State of the jurisdiction of its organization and each other
state in which such Person is qualified to do business and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar Taxes from the appropriate taxing
authority of each of such jurisdictions, each to be dated a recent date prior to
their delivery to Administrative Agent, (ii) a certificate executed by the
secretary or similar officer of such Subsidiary as to (a) the fact that the
attached resolutions of the Governing Body of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (iii) to the extent requested by Administrative Agent, a
favorable opinion of counsel to such Subsidiary, in form and substance
reasonably satisfactory to Administrative Agent and Collateral Agent and their
counsel.

     6.9  MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.

     A. ADDITIONAL MORTGAGES, ETC. From and after the Effective Date, in the
event that (i) Company or any Subsidiary Guarantor acquires any fee interest in
real property with a value


                                      107



of more than $1,500,000 or any Material Leasehold Property or (ii) at the time
any Person becomes a Subsidiary Guarantor, such Person owns or holds any fee
interest in real property or any Material Leasehold Property, in the case of
clause (ii) above excluding any such Real Property Asset the encumbrancing of
which requires the consent of any applicable lessor (including any third party
master lessor) or then-existing senior lienholder, where Company and its
Subsidiaries have attempted in good faith, but are unable, to obtain such
lessor's or senior lienholder's consent (any such non-excluded Real Property
Asset described in the foregoing clause (i) or (ii) being an "ADDITIONAL
MORTGAGED PROPERTY"), Company or such Subsidiary Guarantor shall deliver to
Administrative Agent, as soon as practicable after such Person acquires such
Additional Mortgaged Property or becomes a Subsidiary Guarantor, as the case may
be, a fully executed and notarized Mortgage (an "ADDITIONAL MORTGAGE," and
together with all such Mortgages, the "ADDITIONAL MORTGAGES"), in proper form
for recording in all appropriate places in all applicable jurisdictions,
encumbering the interest of such Loan Party in such Additional Mortgaged
Property; and such opinions, appraisal, documents, title insurance,
environmental reports that would have been delivered on the Closing Date if such
Additional Mortgaged Property were a Closing Date Mortgaged Property or that may
be reasonably required by Administrative Agent or Collateral Agent.

     B. REAL ESTATE APPRAISALS. Company shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser reasonably
satisfactory to Administrative Agent, upon reasonable notice, to visit and
inspect any Additional Mortgaged Property for the purpose of preparing an
appraisal of such Additional Mortgaged Property satisfying the requirements of
any applicable laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent in its
discretion).

     C. CONFORMING LEASEHOLD INTERESTS. If Company or any of its Subsidiaries
acquires any Leasehold Property, Company shall, or shall cause such Subsidiary
to, use its commercially reasonable efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.

     6.10 INTEREST RATE PROTECTION.

          Company shall maintain in effect each Interest Rate Agreement
referenced in subsection 4.1K during its term.

     6.11 DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND CASH MANAGEMENT SYSTEMS;
          GOVERNMENT REIMBURSEMENT DEPOSIT ACCOUNTS.

     A. DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.

          (i) Company shall, and shall cause each of its Domestic Subsidiaries
     to, use and maintain its Deposit Accounts, Securities Accounts and cash
     management systems in a manner reasonably satisfactory to Administrative
     Agent. Company shall not permit any


                                      108



     of such Deposit Accounts (other than Government Reimbursement Deposit
     Accounts) and Securities Accounts at any time to have a principal balance
     in excess of $100,000 unless Company or such Domestic Subsidiary, as the
     case may be, has (i) executed and delivered to Administrative Agent a
     Control Agreement, and (ii) taken all other steps necessary or, in the
     reasonable opinion of Administrative Agent or Collateral Agent, desirable
     to ensure that Collateral Agent has a perfected security interest in such
     Deposit Account; provided that, if Company or such Domestic Subsidiary is
     unable to obtain a Control Agreement from the financial institution at
     which the Deposit Account or Securities Account is maintained, Company
     shall, or shall cause such Domestic Subsidiary to, within 30 days after
     receiving a written request by Administrative Agent to do so, transfer all
     amounts in the applicable Deposit Account or Securities Account to a
     Deposit Account or Securities Account, as applicable, maintained at a
     financial institution from which Company or such Domestic Subsidiary has
     obtained a Control Agreement. Company shall not permit the aggregate amount
     on deposit in all Deposit Accounts of Company and of its Domestic
     Subsidiaries (other than Deposit Accounts maintained with Administrative
     Agent and Deposit Accounts with respect to which the depository institution
     has executed a Control Agreement) at any time to exceed $1,000,000.

          (ii) Holdings shall deliver to Administrative Agent a fully executed
     Control Agreement for each Deposit Account and Securities Account, if any,
     maintained by Holdings; provided that, if Holdings is unable to obtain a
     Control Agreement from the financial institution at which any such Deposit
     Account or Securities Account is maintained, Holdings shall, within 30 days
     after receiving a written request by Administrative Agent to do so,
     transfer all amounts in the applicable Deposit Account or Securities
     Account to a Deposit Account or Securities Account, as applicable,
     maintained at a financial institution from which Holdings can obtain a
     Control Agreement.

     B. GOVERNMENT REIMBURSEMENT DEPOSIT ACCOUNTS. With respect to each
Government Reimbursement Deposit Account, Company shall, and shall cause each of
its Domestic Subsidiaries to, (i) execute and deliver to Administrative Agent a
Deposit Account Instruction Agreement and (ii) deposit therein only proceeds of
receivables of Government Reimbursement Programs; provided that, if Company or
such Domestic Subsidiary is unable to obtain a Deposit Account Instruction
Agreement from the financial institution at which the Government Reimbursement
Deposit Account is maintained, Company shall, or shall cause such Domestic
Subsidiary to, within 30 days after receiving a written request by
Administrative Agent to do so, transfer all amounts in the applicable Government
Reimbursement Deposit Account to a Government Reimbursement Deposit Account
maintained at a financial institution from which Company or such Domestic
Subsidiary has obtained a Deposit Account Instruction Agreement.

     6.12 RATINGS.

          Company shall maintain continually in effect the rating of the Loans
by S&P and Moody's.


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SECTION 7. NEGATIVE COVENANTS

          Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than Unasserted Obligations) and the
cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Holdings and Company shall perform,
and shall cause each of their Subsidiaries to perform, all covenants in this
Section 7.

     7.1  INDEBTEDNESS.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

          (i) Company may become and remain liable with respect to the
     Obligations;

          (ii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to Contingent Obligations permitted by subsection 7.4
     and, upon any matured obligations actually arising pursuant thereto, the
     Indebtedness corresponding to the Contingent Obligations so extinguished;

          (iii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to Indebtedness in respect of Capital Leases incurred
     at the time of, or within ninety days after, the acquisition of the related
     property (it being understood that the completion of the construction or
     development of express recovery or similar units, additional beds at
     existing Facilities or new Facilities shall constitute the acquisition of
     property) aggregating not in excess of $15,000,000 at any one time;
     provided that the aggregate amount of Indebtedness represented by (x)
     Converted Capital Leases or (y) other Capital Leases that are assumed in
     connection with Permitted Acquisitions, shall not be included in
     calculating the aggregate amount of Indebtedness outstanding in respect of
     Capital Leases for the purposes of this subsection 7.1(iii) if, after
     giving effect to such conversion or assumption, Company is in Pro Forma
     Compliance with the maximum Consolidated Leverage Ratio permitted by
     subsection 7.6B less 0.25x;

          (iv) Company may become and remain liable with respect to Indebtedness
     to any Subsidiary, and any Subsidiary Guarantor may become and remain
     liable with respect to Indebtedness to Company or any Subsidiary Guarantor;
     provided that (a) a security interest in all such intercompany Indebtedness
     shall have been granted to Administrative Agent for the benefit of Lenders
     and (b) if such intercompany Indebtedness is evidenced by a promissory note
     or other instrument, such promissory note or instrument shall have been
     pledged to Administrative Agent pursuant to the Security Agreement;

          (v) Company and its Subsidiaries, as applicable, may remain liable
     with respect to Indebtedness described in Schedule 7.1 annexed hereto;


                                      110



          (vi) Company may become and remain liable with respect to (x) the
     Bridge Facility or the Senior Subordinated Notes, provided that the
     proceeds of the Indebtedness incurred under this clause (x) shall be used
     solely, to repay in full Indebtedness under the Existing Second Lien Credit
     Agreement, including the payment of any prepayment premiums and to fund a
     portion of the Acquisition Financing Requirements; and (y) unsecured
     Subordinated Indebtedness on terms and conditions substantially the same as
     the Senior Subordinated Notes or otherwise reasonably satisfactory to
     Administrative Agent the proceeds of which shall be used solely to (1)
     refinance Indebtedness previously incurred under this subsection 7.1(vi),
     (2) refinance Indebtedness outstanding under this Agreement or (3) finance
     Permitted Acquisitions; provided that the maximum principal amount of
     Indebtedness permitted pursuant to this subsection 7.1(vi) at any time
     shall not exceed $300,000,000;

          (vii) Company or a Subsidiary of Company may become and remain liable
     with respect to Indebtedness of any Person assumed in connection with a
     Permitted Acquisition and a Person that becomes a direct or indirect
     wholly-owned Subsidiary of Company as a result of a Permitted Acquisition
     may remain liable with respect to Indebtedness existing on the date of such
     acquisition; provided that such Indebtedness is not created in anticipation
     of such acquisition and the aggregate principal amount of such Indebtedness
     does not exceed (a) in the case of Capital Leases assumed in connection
     with any Permitted Acquisitions, $45,000,000 and an additional $20,000,000
     of such Capital Leases, if after giving effect to the assumption of any
     such Capital Lease, the Consolidated Leverage Ratio, calculated on a Pro
     Forma Basis, is equal to or less than 3:00:1.00 or (b) $5,000,000 with
     respect to any other such assumed Indebtedness;

          (viii) [intentionally omitted];

          (ix) Indebtedness of Company or any of its Subsidiaries in respect of
     insurance premiums payable to Fountain View Reinsurance, Inc. in an
     aggregate amount not to exceed $25,000,000;

          (x) Indebtedness of Company to directors, employees and officers of
     any Loan Party for the purpose of purchasing from such directors, employees
     and officers Equity Interest of Company; provided that the amount of the
     annual principal payments with respect to such Indebtedness, together with
     all Restricted Junior Payments made pursuant to subsection 7.5(ii)(d),
     shall not at any time exceed the amounts of Restricted Junior Payments
     permitted pursuant to subsection 7.5(ii)(d);

          (xi) Indebtedness of Company or any of its Subsidiaries to sellers in
     connection with an exercise of a purchase option under a lease with respect
     to any existing Facility or a Permitted Acquisition in an amount not to
     exceed 60% of the purchase price or total consideration paid with respect
     to such purchase option or Permitted Acquisition; provided that, except to
     the extent permitted by subsection 7.2A(vi), such Indebtedness shall be
     unsecured and subordinated in right of payment to the Obligations
     (including any guaranty thereof) on terms and conditions reasonably
     satisfactory to Administrative Agent; and


                                      111



          (xii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to other Indebtedness in an aggregate principal amount
     not to exceed $15,000,000 at any time outstanding.

     7.2  LIENS AND RELATED MATTERS.

     A. PROHIBITION ON LIENS. Neither Holdings nor Company shall, and neither
shall permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except,
with respect to Company and its Subsidiaries:

          (i) Permitted Encumbrances;

          (ii) Liens securing Capital Leases permitted pursuant to subsection
     7.1; provided, however, that the Lien shall apply only to the asset so
     acquired and proceeds thereof;

          (iii) Liens assumed in connection with a Permitted Acquisition and
     Liens on assets of a Person that becomes a direct or indirect Subsidiary of
     Company after the date of this Agreement in a Permitted Acquisition,
     provided, however, that such Liens exist at the time such Person becomes a
     Subsidiary, apply only to the assets so acquired and the proceeds thereof
     and are not created in anticipation of such acquisition and, in any event,
     do not in the aggregate secure Indebtedness in excess of $5,000,000 at any
     time;

          (iv) Liens described in Schedule 7.2 annexed hereto;

          (v) [Intentionally omitted];

          (vi) Liens securing Indebtedness permitted to be incurred pursuant to
     subsection 7.1(xi) on the assets so acquired and the proceeds thereof;
     provided that the aggregate original principal amount of the Indebtedness
     so secured does not exceed $30,000,000; and

          (vii) Other Liens securing Indebtedness in an aggregate amount not to
     exceed $5,000,000 at any time outstanding.

     Notwithstanding the foregoing, Holdings, Company and its Domestic
Subsidiaries shall not enter into, or suffer to exist, any control agreements
(as such term is defined in the UCC), other than Control Agreements entered into
pursuant to subsection 6.11 or the Security Agreement.

     B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter


                                      112



acquired, other than Liens excepted by the provisions of subsection 7.2A, it
shall make or cause to be made effective provision whereby the Obligations will
be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; provided
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.

     C. NO FURTHER NEGATIVE PLEDGES. Neither Holdings nor any of its
Subsidiaries shall enter into any agreement (other than the Senior Subordinated
Note Indenture or an agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or hereafter acquired,
except with respect to (i) specific property encumbered to secure payment of
particular Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale; or (ii) customary restrictions or conditions contained
in any agreement, indenture or other instrument governing any Indebtedness
permitted hereunder.

     D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Neither Holdings nor Company shall, and neither shall permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Equity Interests owned by Holdings, Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings, Company or any other Subsidiary of Company, (iii) make
loans or advances to Holdings, Company or any other Subsidiary of Company, or
(iv) transfer any of its property or assets to Holdings, Company or any other
Subsidiary of Company, except (a) as provided in this Agreement, (b) customary
restrictions or conditions contained in any agreement, indenture or other
instrument governing any Indebtedness permitted hereunder and (c) as may be
provided in an agreement with respect to an Asset Sale.

     7.3  INVESTMENTS; ACQUISITIONS.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, or acquire, by purchase or otherwise, all
or substantially all the business, property or fixed assets of, or Equity
Interests of any Person, or any division or line of business of any Person
except:

          (i) Holdings and its Subsidiaries may make and own Investments in Cash
     and Cash Equivalents;

          (ii) Holdings and its wholly-owned Domestic Subsidiaries may make and
     own equity Investments in their respective wholly-owned Domestic
     Subsidiaries;

          (iii) Company and its Subsidiaries may make intercompany loans to the
     extent permitted under subsection 7.1(iv);


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          (iv) Company and its Subsidiaries may (x) make Consolidated Capital
     Expenditures permitted by subsection 7.8, (y) enter into any Converted
     Capital Lease otherwise permitted pursuant to this Agreement and (z)
     exercise a purchase option under any lease with respect to any existing
     Facility, to the extent otherwise permitted under this Agreement;

          (v) Company and its Subsidiaries may continue to own the Investments
     owned by them and described in Schedule 7.3 annexed hereto;

          (vi) Company and its Domestic Subsidiaries may (x) acquire assets
     (including Equity Interests and including Equity Interests of Subsidiaries
     formed in connection with any such acquisition), (y) incur construction and
     development costs and expenses in connection with the construction and
     development of express recovery or similar units or (z) incur construction
     and development costs and expenses in connection with the construction and
     development of addition beds at existing Facilities or the construction and
     development of new Facilities for a total consideration (including any
     Indebtedness that is assumed or repaid by Company or any of its
     Subsidiaries in connection with such acquisition) not in excess of
     $75,000,000 in any one Fiscal Year (and to the extent acquisitions,
     development or construction with a total consideration of less than
     $75,000,000 are made in any Fiscal Year, the excess of $75,000,000 over the
     total consideration for acquisitions, development or construction made in
     such Fiscal Year, not to exceed $25,000,000, may be used in the following
     Fiscal Year) and the sum of (A) $250,000,000 plus (B) 50% of the
     Consolidated Net Income of Holdings and its Subsidiaries for the period
     (taken as one accounting period) from January 1, 2006 to the end of the
     most recently ended Fiscal Quarter for which financial statements have been
     delivered pursuant to subsection 6.1(iii) or 6.1(iv) minus (C) the
     aggregate amount of Investments made pursuant to subsection 7.3(xii); in
     the aggregate and continue to own such assets after the acquisition,
     development or construction thereof; provided that (i) no Potential Event
     of Default or Event of Default shall have occurred and be continuing at the
     time such acquisition, development or construction occurs or after giving
     effect thereto, (ii) Company shall, and shall cause its Domestic
     Subsidiaries to, comply with the requirements of subsections 6.8 and 6.9
     with respect to each such acquisition, development or construction that
     results in a Person becoming a Subsidiary, (iii) at the time of and after
     giving effect to such acquisition, development or construction, Company is
     in Pro Forma Compliance with (a) the financial covenants contained in
     subsection 7.6 and (b) the maximum Consolidated Leverage Ratio permitted by
     subsection 7.6B less 0.25x, (iv) for any acquisition, development or
     construction with a value in excess of $5,000,000, prior to the
     consummation of such acquisition, development or construction, Company
     shall have delivered written notice thereof to Administrative Agent (which
     notice shall include a reasonably detailed description of such proposed
     acquisition, development or construction), together with the most recent
     audited financial statements, if available, of the seller or entity to be
     acquired and (v) for any acquisition, development or construction with a
     value in excess of $5,000,000, Company shall have delivered projections
     updating the Financial Plans delivered pursuant to subsection 6.1(xiii),
     which projections shall reflect Pro Forma Compliance by


                                      114



     Company with the financial covenants contained in subsection 7.6 as of the
     last day of each of the four Fiscal Quarters ending immediately after such
     acquisition, development or construction;

          (vii) Company and its Domestic Subsidiaries may make and own other
     Investments in an aggregate amount not to exceed at any time $15,000,000;

          (viii) Company may acquire and hold obligations of one or more
     officers or other employees of Company or its Subsidiaries in connection
     with such officers' or employees' acquisition of shares of Holdings' Equity
     Interests, so long as no cash is actually advanced by Company or any of its
     Subsidiaries to such officers or employees in connection with the
     acquisition of any such obligations;

          (ix) Company and its Subsidiaries may receive and hold promissory
     notes and other non-cash consideration received in connection with any
     Asset Sale permitted by subsection 7.7;

          (x) Company and its Subsidiaries may acquire Securities in connection
     with the satisfaction or enforcement of Indebtedness or claims due or owing
     to Company or any of its Subsidiaries or as security for any such
     Indebtedness or claim;

          (xi) Company and its Subsidiaries may consummate the Merger in
     accordance with the terms and conditions of the Acquisition Agreement;

          (xii) Company and its Subsidiaries may make and own equity and debt
     Investments in domestic Joint Ventures in an aggregate amount at any time
     outstanding not to exceed $25,000,000 (it being agreed the amount of any
     investment "outstanding" shall not be reduced by any amount received in
     respect of such investment that is included in Consolidated EBITDA for any
     period); provided that, after giving effect to any such Investment,
     acquisitions made by Company and its Subsidiaries in reliance on subsection
     7.3(vi) would not exceed the maximum dollar amount referenced in subsection
     7.3(vi); and

          (xiii) Company or any of its Domestic Subsidiaries may, at any time on
     or before on or before March 31, 2006, acquire up to three Facilities in
     the Midwestern United States previously disclosed to Administrative Agent
     or Equity Interests in a Person owning up to three such Facilities for
     total consideration not in excess of $35,000,000; provided that (i) no
     Potential Event of Default or Event of Default shall have occurred and be
     continuing at the time such acquisition occurs, (ii) Company shall, and
     shall cause its Domestic Subsidiaries to, comply with the requirements of
     subsections 6.8 and 6.9 to the extent the acquisition results in a Person
     becoming a Subsidiary, (iii) at the time of and after giving effect to the
     acquisition, Company's Consolidated Total Leverage Ratio for the most
     recently ended twelve month period prior to the consummation of the
     acquisition for which financial statements have been delivered pursuant to
     subsection 6.1(iii) or (iv) (prepared in accordance with Regulation S-X
     under the Securities Act to give pro forma effect to the Transactions and
     the acquisition as if


                                      115



     they had occurred at the beginning of such four-fiscal quarter period and
     with such other adjustments reasonably satisfactory to Administrative
     Agent) be an amount which, when rounded to the nearest tenth, is no more
     than 5.7 to 1.0, (iv), prior to the consummation of the acquisition,
     Company shall have delivered the most recent audited financial statements,
     if available, of the seller or entity to be acquired and (v) Company shall
     have delivered projections updating the Financial Plans delivered pursuant
     to subsection 6.1(xiii), which projections shall reflect Pro Forma
     Compliance by Company with the financial covenants contained in subsection
     7.6 as of the last day of each of the four Fiscal Quarters ending
     immediately after the acquisition.

     7.4  CONTINGENT OBLIGATIONS.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, directly or indirectly, create or become or remain liable
with respect to any Contingent Obligation, except:

          (i) Company may become and remain liable with respect to Contingent
     Obligations in respect of Letters of Credit;

          (ii) Company may become and remain liable with respect to Contingent
     Obligations under Hedge Agreements required under subsection 6.10 and under
     other Hedge Agreements with respect to permitted Indebtedness;

          (iii) Company and its Subsidiaries may become and remain liable with
     respect to Contingent Obligations in respect of customary indemnification
     and purchase price adjustment obligations incurred in connection with Asset
     Sales or other sales of assets;

          (iv) Company and its Subsidiaries may become and remain liable with
     respect to Contingent Obligations in respect of any Indebtedness of Company
     or any of its Subsidiaries permitted by subsection 7.1; provided that any
     Contingent Obligations with respect to Indebtedness permitted pursuant to
     subsections 7.1(vi) or 7.1(xi) shall be subordinated to the Obligations
     (including any guaranty thereof) to the same extent as such Indebtedness is
     required to be so subordinated;

          (v) Company or any Subsidiary Guarantor may become and remain liable
     with respect to Contingent Obligations in respect of other obligations of
     Company, any other Subsidiary Guarantor or Fountain View Reinsurance, Inc.
     not prohibited by this Agreement;

          (vi) Company and its Subsidiaries, as applicable, may remain liable
     with respect to Contingent Obligations described in Schedule 7.4 annexed
     hereto; and

          (vii) Company and its Subsidiaries may become and remain liable with
     respect to other Contingent Obligations; provided that the maximum
     aggregate liability, contingent or otherwise, of Company and its
     Subsidiaries in respect of all such Contingent Obligations shall at no time
     exceed $2,000,000.


                                      116


     7.5  RESTRICTED JUNIOR PAYMENTS.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that Company may (i) make regularly
scheduled payments of interest in respect of any Subordinated Indebtedness in
accordance with the terms of, and only to the extent required by, and subject to
the subordination provisions contained in, the indenture or other agreement
pursuant to which such Subordinated Indebtedness was issued, as such indenture
or other agreement may be amended from time to time to the extent permitted
under subsection 7.12A, (ii) make Restricted Junior Payments to Holdings (a) to
the extent necessary to permit Holdings to pay actual general administrative
costs and expenses, (b) to the extent necessary to permit Holdings to discharge
the consolidated tax liabilities of Holdings and its Subsidiaries, (c) so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing or shall be caused thereby, excluding the repurchases of Equity
Interests described in clause (d) of this subsection 7.5, to permit Holdings to
pay and Holdings may pay dividends on, repurchase or redeem its Equity Interests
in an amount not to exceed the amount of Consolidated Excess Cash Flow for the
immediately preceding Fiscal Year not otherwise required to applied as a
mandatory prepayment pursuant to subsection 2.4B(iii)(e); provided that the
Consolidated Leverage Ratio as of the last day of the Fiscal Quarter immediately
preceding such payment, repurchase or redemption is less than 3.50:1.00, (d) so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or would result therefrom, to allow Holdings to repurchase and
Holdings may repurchase its Equity Interests owned by directors, officers and
employees of Holdings or its Subsidiaries or make payments to directors,
officers and employees of Holdings or its Subsidiaries upon termination of
employment in connection with the exercise of stock options, stock appreciation
rights or similar equity incentives or equity based incentives pursuant to
management or other incentive plans or in connection with the death or
disability of such directors, officers and employees in an aggregate amount,
together with principal payments on Indebtedness permitted pursuant subsection
7.1(x), not to exceed $1,000,000 in any Fiscal Year and (e) of a portion of the
proceeds of the Senior Subordinated Notes or the Bridge Facility, as applicable,
for use by Holdings to fund a portion of the Acquisition Financing Requirements,
in each case so long as Holdings applies the amount of any such Restricted
Junior Payment for such purpose, (iii) repay Subordinated Indebtedness
(including the Senior Subordinated Notes or the Bridge Facility, as applicable)
with the proceeds of other Subordinated Indebtedness permitted to be incurred
pursuant to subsection 7.1(vi) and (iv) repay the Bridge Facility with Net
Securities Proceeds from the issuance of any Equity Interests of Holdings or any
of its Subsidiaries.

     7.6  FINANCIAL COVENANTS.

     A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the ratio,
calculated on a Pro Forma Basis, of (i) Consolidated EBITDA to (ii) Consolidated
Cash Interest Expense for any four-Fiscal Quarter period ending during any of
the periods set forth below to be less than the correlative ratio indicated:


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                     MINIMUM INTEREST
      PERIOD          COVERAGE RATIO
      ------         ----------------
                  
March 31, 2006           1.75:1.00
June 30, 2006            1.65:1.00
September 30, 2006       1.60:1.00
December 31, 2006        1.60:1.00

March 31, 2007           1.65:1.00
June 30, 2007            1.70:1.00
September 30, 2007       1.75:1.00
December 31, 2007        1.75:1.00

March 31, 2008           1.85:1.00
June 30, 2008            1.85:1.00
September 30, 2008       1.85:1.00
December 31, 2008        1.85:1.00

March 31, 2009           2.00:1.00
June 30, 2009            2.00:1.00
September 30, 2009       2.00:1.00
December 31, 2009        2.00:1.00

March 31, 2010           2.10:1.00
June 30, 2010            2.10:1.00
September 30, 2010       2.10:1.00
December 31, 2010        2.10:1.00

March 31, 2011           2.10:1.00
June 30, 2011            2.10:1.00
September 30, 2011       2.10:1.00
December 31, 2011        2.10:1.00

March 31, 2012           2.10:1.00
June 30, 2012            2.10:1.00
September 30, 2012       2.10:1.00
December 31, 2012        2.10:1.00


     B. MAXIMUM LEVERAGE RATIO. Company shall not permit the Consolidated
Leverage Ratio, calculated on a Pro Forma Basis, as of the last day of each
Fiscal Quarter ending on the dates set forth below to exceed the correlative
ratio indicated:


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      PERIOD         MAXIMUM LEVERAGE RATIO
      ------         ----------------------
                  
March 31, 2006              6.50:1.00
June 30, 2006               6.50:1.00
September 30, 2006          6.50:1.00
December 31, 2006           6.50:1.00

March 31, 2007              6.25:1.00
June 30, 2007               6.25:1.00
September 30, 2007          6.25:1.00
December 31, 2007           6.00:1.00

March 31, 2008              5.50:1.00
June 30, 2008               5.50:1.00
September 30, 2008          5.50:1.00
December 31, 2008           5.50:1.00

March 31, 2009              5.00:1.00
June 30, 2009               5.00:1.00
September 30, 2009          5.00:1.00
December 31, 2009           5.00:1.00

March 31, 2010              4.50:1.00
June 30, 2010               4.50:1.00
September 30, 2010          4.50:1.00
December 31, 2010           4.50:1.00

March 31, 2011              4.50:1.00
June 30, 2011               4.50:1.00
September 30, 2011          4.50:1.00
December 31, 2011           4.50:1.00

March 31, 2012              4.50:1.00
June 30, 2012               4.50:1.00
September 30, 2012          4.50:1.00
December 31, 2012           4.50:1.00


     7.7  RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, alter the corporate, capital or legal structure of
Holdings, Company or any of its Subsidiaries, or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as


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lessor or sublessor), transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property or assets
(including its notes or receivables and Equity Interests of a Subsidiary,
whether newly issued or outstanding), whether now owned or hereafter acquired,
except:

          (i) any Subsidiary of Company may be merged or consolidated with or
     into Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
     wound up or dissolved, or all or any part of its business, property or
     assets may be conveyed, sold, sub-leased, leased, transferred or otherwise
     disposed of, in one transaction or a series of transactions, to Company or
     any wholly-owned Subsidiary Guarantor; provided that, in the case of such a
     merger, Company or such wholly-owned Subsidiary Guarantor shall be the
     continuing or surviving Person;

          (ii) Company and its Subsidiaries may convey, sell, transfer or
     otherwise dispose of assets in transactions that do not constitute Asset
     Sales; provided that the consideration received for such assets shall be in
     an amount at least equal to the fair market value thereof;

          (iii) Company and its Subsidiaries may dispose of obsolete, worn out
     or surplus property in the ordinary course of business;

          (iv) Company and its Subsidiaries may make Asset Sales of assets
     having a fair market value not in excess of $10,000,000 in any Fiscal Year;
     provided that (a) the consideration received for such assets shall be in an
     amount at least equal to the fair market value thereof; (b) not less than
     75% of the consideration received shall be Cash or Cash Equivalents,
     provided, however, that in the case of any Asset Sale to a domestic Joint
     Venture permitted pursuant to subsection 7.3(xii), the amount of the
     Investment therein received or retained by Company and its Subsidiaries in
     consideration of such Asset Sale shall be treated as Cash solely for
     purposes of satisfying this requirement, (c) no Potential Event of Default
     or Event of Default shall have occurred or be continuing after giving
     effect thereto; and (d) the proceeds of such Asset Sales shall be applied
     as required by subsection 2.4B(iii)(a) or subsection 2.4D;

          (v) in order to resolve disputes that occur in the ordinary course of
     business, Company and its Subsidiaries may discount or otherwise compromise
     for less than the face value thereof, notes or accounts receivable;

          (vi) Company or a Subsidiary may sell or dispose of shares of Equity
     Interests of any of its Subsidiaries in order to qualify members of the
     Governing Body of the Subsidiary if required by applicable law;

          (vii) any Person (other than Holdings) may be merged with or into
     Company or any Subsidiary if the acquisition of the Equity Interests of
     such Person by Company or such Subsidiary would have been permitted
     pursuant to subsection 7.3; provided that (a) in the case of Company,
     Company shall be the continuing or surviving Person, (b) if a Subsidiary is
     not the surviving or continuing Person, the surviving Person becomes a


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     Subsidiary and complies with the provisions of subsection 6.8 and (c) no
     Potential Event of Default or Event of Default shall have occurred or be
     continuing after giving effect thereto;

          (viii) Company or any Subsidiary may sell or dispose of all or any
     portion of the assets, or the Equity Interests of the Subsidiaries that own
     the assets, related to the pharmacy or therapy business of Company and its
     Subsidiaries; provided that the proceeds of such asset sales are applied as
     required pursuant to subsection 2.4B(iii);

          (ix) the Acquisition may occur in accordance with the terms and
     conditions of the Acquisition Agreement.

     7.8  CONSOLIDATED CAPITAL EXPENDITURES.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, make or incur Consolidated Capital Expenditures in any
Fiscal Year in an aggregate amount in excess of 2.50% of Consolidated Revenues
of Holdings and its Subsidiaries for the immediately preceding Fiscal Year (the
"MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES AMOUNT"); provided that the Maximum
Consolidated Capital Expenditures Amount for any Fiscal Year shall be increased
by an amount equal to the excess of the Maximum Consolidated Capital
Expenditures Amount for the previous Fiscal Year (without giving effect to any
adjustment in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year; provided,
further that all Consolidated Capital Expenditures made or incurred in any
Fiscal Year shall be deemed to have first been made out of any excess Maximum
Consolidated Capital Expenditures Amounts carried over from a prior Fiscal Year
prior to having been made from the permitted Maximum Consolidated Capital
Expenditures Amount for such Fiscal Year and in no event shall any unused amount
of a previously carried over excess Maximum Consolidated Capital Expenditures
Amount be carried over into a succeeding Fiscal Year.

     7.9  TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Holdings or Company or with any Affiliate of Holdings or
Company or of any such holder, on terms that are less favorable to Holdings,
Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to members of
the Governing Bodies of Company and its Subsidiaries, or (iii) payments of
management fees to Onex or any Affiliate of Onex in an amount not to exceed
$500,000 per Fiscal Year, provided that if an Event of Default shall occur, then
no payment of such fees shall be permitted for so long as such Event of Default
shall be continuing, it being agreed that any amount of such fees which accrues
while such Event of Default exists may be paid to Onex


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and/or its Affiliates, as applicable, when such Event of Default is fully cured
(and no other Event of Default then exists).

     7.10 SALES AND LEASE-BACKS.

          Neither Holdings nor Company shall, and neither shall permit any of
its Subsidiaries to, directly or indirectly, become or remain liable as lessee
or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) that Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries) or (ii) that Company or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property that has been or is to be sold or transferred by Company or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease; provided that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that Company or any of its
Subsidiaries would be permitted to enter into, and remain liable under, such
lease to the extent that the transaction would be permitted under subsection
7.1, assuming the sale and lease back transaction constituted Indebtedness in a
principal amount equal to the gross proceeds of the sale.

     7.11 CONDUCT OF BUSINESS.

          From and after the Effective Date Holdings shall not (i) own any
assets other than the Equity Interests of its Subsidiaries and (ii) engage in
any business other than (a) activities related to or incidental to the ownership
of the assets referenced in the foregoing clause (i) and (b) entering into and
performing its obligations under and in accordance with the Loan Documents to
which it is a party.

          From and after the Effective Date, Holdings shall not permit any of
its Subsidiaries to engage in any business other than (i) the businesses engaged
in by such Subsidiaries on the Effective Date and similar or related businesses
and (ii) such other lines of business as may be consented to by Requisite
Lenders.

     7.12 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS;
          AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS; DESIGNATION OF DESIGNATED
          SENIOR INDEBTEDNESS.

     A. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS. Company
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or


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change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be materially adverse to Company or Lenders.

     B. AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS. Neither Company nor any of
its Subsidiaries will agree to any amendment to, or waive any of its rights
under, any Related Agreement (other than any agreement evidencing or governing
any Subordinated Indebtedness), if such amendment or waiver would materially
increase the obligations of Company or any of its Subsidiaries thereunder or
confer additional rights on the other parties thereto or on the holders
thereunder in a manner materially adverse to Holdings or any of its Subsidiaries
or the Lenders, after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment or waiver.

     C. DESIGNATION OF "DESIGNATED SENIOR INDEBTEDNESS." Company shall not
designate any Indebtedness as "Designated Senior Indebtedness" (as defined in
the Senior Subordinated Note Indenture) for purposes of the Senior Subordinated
Note Indenture without the prior written consent of Requisite Lenders.

     7.13 FISCAL YEAR.

          Company shall not change its Fiscal Year-end from December 31.

     7.14 GOVERNMENT REIMBURSEMENT DEPOSIT ACCOUNTS.

          Company shall not, and shall not permit any of or any of its
Subsidiaries, to (i) make any withdrawal from a Deposit Account for which a
Deposit Account Instruction Agreement has been entered into, or (ii) change the
payment instructions in a Deposit Account Instruction Agreement or (iii)
terminate a Deposit Account Instruction Agreement, in each case, without the
written consent of Administrative Agent; provided that each such action shall be
permitted in connection with the transfer of the cash management operations of
Company to a new financial institution that, prior to such action, enters into
Deposit Account Instruction Agreements reasonably satisfactory to Administrative
Agent and Collateral Agent.

SECTION 8. EVENTS OF DEFAULT

          If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:

     8.1  FAILURE TO MAKE PAYMENTS WHEN DUE.

          Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay


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any interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or

     8.2  DEFAULT IN OTHER AGREEMENTS.

          (i) Failure of Holdings or any of its Subsidiaries to pay when due any
     principal of or interest on or any other amount payable in respect of one
     or more items of Indebtedness (other than Indebtedness referred to in
     subsection 8.1) or Contingent Obligations in an individual principal amount
     of $7,500,000 or more or with an aggregate principal amount of $7,500,000
     or more, in each case beyond the end of any grace period provided therefor;
     or

          (ii) breach or default by Holdings or any of its Subsidiaries with
     respect to any other material term of (a) one or more items of Indebtedness
     or Contingent Obligations in the individual or aggregate principal amounts
     referred to in clause (i) above or (b) any loan agreement, mortgage,
     indenture or other agreement relating to such item(s) of Indebtedness or
     Contingent Obligation(s), if the effect of such breach or default is to
     cause, or to permit the holder or holders of that Indebtedness or
     Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
     to cause, that Indebtedness or Contingent Obligation(s) to become or be
     declared due and payable prior to its stated maturity or the stated
     maturity of any underlying obligation, as the case may be (upon the giving
     or receiving of notice, lapse of time, both, or otherwise); or

     8.3  BREACH OF CERTAIN COVENANTS.

          Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or

     8.4  BREACH OF WARRANTY.

          Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or

     8.5  OTHER DEFAULTS UNDER LOAN DOCUMENTS.

          Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 45 days (except for
defaults with respect to the terms contained in subsections 6.1(ii), (iii), (iv)
and (xiii), for which such period shall be 30 days) after the earlier of (i) an
Officer of Company or such Loan Party becoming aware of such default or (ii)
receipt by Company and such Loan Party of notice from Administrative Agent or
any Lender of such default; or


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     8.6  INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

          (i) A court having jurisdiction in the premises shall enter a decree
     or order for relief in respect of Holdings, Company or any of its Material
     Subsidiaries in an involuntary case under the Bankruptcy Code or under any
     other applicable bankruptcy, insolvency or similar law now or hereafter in
     effect, which decree or order is not stayed; or any other similar relief
     shall be granted under any applicable federal or state law; or

          (ii) an involuntary case shall be commenced against Holdings, Company
     or any of its Material Subsidiaries under the Bankruptcy Code or under any
     other applicable bankruptcy, insolvency or similar law now or hereafter in
     effect; or a decree or order of a court having jurisdiction in the premises
     for the appointment of a receiver, liquidator, sequestrator, trustee,
     custodian or other officer having similar powers over Holdings, Company or
     any of its Material Subsidiaries, or over all or a substantial part of its
     property, shall have been entered; or there shall have occurred the
     involuntary appointment of an interim receiver, trustee or other custodian
     of Holdings, Company or any of its Material Subsidiaries for all or a
     substantial part of its property; or a warrant of attachment, execution or
     similar process shall have been issued against any substantial part of the
     property of Holdings, Company or any of its Material Subsidiaries, and any
     such event described in this clause (ii) shall continue for 60 days unless
     dismissed, bonded or discharged; or

     8.7  VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

          (i) Holdings, Company or any of its Material Subsidiaries shall have
     an order for relief entered with respect to it or commence a voluntary case
     under the Bankruptcy Code or under any other applicable bankruptcy,
     insolvency or similar law now or hereafter in effect, or shall consent to
     the entry of an order for relief in an involuntary case, or to the
     conversion of an involuntary case to a voluntary case, under any such law,
     or shall consent to the appointment of or taking possession by a receiver,
     trustee or other custodian for all or a substantial part of its property;
     or Holdings, Company or any of its Material Subsidiaries shall make any
     assignment for the benefit of creditors; or

          (ii) Holdings, Company or any of its Material Subsidiaries shall be
     unable, or shall fail generally, or shall admit in writing its inability,
     to pay its debts as such debts become due; or the Governing Body of
     Holdings, Company or any of its Material Subsidiaries (or any committee
     thereof) shall adopt any resolution or otherwise authorize any action to
     approve any of the actions referred to in clause (i) above or this clause
     (ii); or

     8.8  JUDGMENTS AND ATTACHMENTS.

          Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $7,500,000 or (ii)
in the aggregate at any time an amount in excess of $7,500,000, in either case
to the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage,


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shall be entered or filed against Company or any of its Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or

     8.9  DISSOLUTION.

          Any order, judgment or decree shall be entered against Holdings,
Company or any of its Material Subsidiaries decreeing the dissolution or split
up of Holdings, Company or that Material Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or

     8.10 EMPLOYEE BENEFIT PLANS.

          There shall occur one or more ERISA Events that, individually or in
the aggregate, result in or would reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $7,500,000 during the term of this Agreement; or, as of the date of
the most recent actuarial valuation of any Pension Plan, there shall exist an
amount equal to the accrued liability, less the actuarial value of assets, of
such Pension Plan (in each case, determined under such actuarial valuation for
funding purposes), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which the actuarial value of assets exceeds the accrued liability, as so
determined), which exceeds $7,500,000; or

     8.11 CHANGE IN CONTROL.

          A Change in Control shall have occurred; or

     8.12 INVALIDITY OF LOAN DOCUMENTS; FAILURE OF SECURITY; REPUDIATION OF
          OBLIGATIONS.

          At any time after the execution and delivery thereof, (i) any Loan
Document or any provision thereof, for any reason other than the satisfaction in
full of all Obligations, shall cease to be in full force and effect (other than
in accordance with its terms) or shall be declared to be null and void, (ii)
Administrative Agent shall not have or shall cease to have a valid and perfected
First Priority Lien in any Collateral purported to be covered by the Collateral
Documents, in each case for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, or (iii) any Loan
Party shall contest the validity or enforceability of any Loan Document or any
provision thereof in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Loan
Document or any provision thereof to which it is a party; or

     8.13 FAILURE TO MAINTAIN HEALTHCARE AUTHORIZATIONS.

          Any Government Authority shall finally revoke or fail to renew any
Healthcare Authorization of Company or one of its Subsidiaries or Company or one
of its Subsidiaries shall for any reason lose any Healthcare Authorization or
suffer the imposition of any restraining


                                      126



order, escrow, suspension or impound of funds in connection with any proceeding
(judicial or administrative) with respect to any license, permit or franchise
which event, either individually or in the aggregate for all such events, could
reasonably be expected to have a Material Adverse Effect; or

     8.14 CONDUCT OF BUSINESS BY HOLDINGS.

          Holdings shall (i) engage in any business other than entering into and
performing its obligations under and in accordance with the Loan Documents and
Related Agreements to which it is a party or (ii) own any assets other than (a)
Equity Interests in Company and (b) Cash and Cash Equivalents for the purpose of
paying general operating expenses of Holdings or (iii) have any Indebtedness
other than its obligations under the Holdings Security Agreement; or

     8.15 AMENDMENT OF CERTAIN DOCUMENTS OF HOLDINGS.

          Holdings shall agree to any amendment to, or waive any of its rights
under, the Acquisition Agreement or the Holdings Certificate of Designations, if
such amendment or waiver would materially increase the obligations of Holdings
thereunder or confer additional rights on the other parties thereto or on the
holders thereunder in a manner materially adverse to Holdings, any of its
Subsidiaries or the Lenders, in each case without obtaining the prior written
consent of Requisite Lenders to such amendment or waiver:

          THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to 105% of the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding (whether
or not any beneficiary under any such Letter of Credit shall have presented, or
shall be entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Company, and the obligation of each Lender to make
any Loan, the obligation of Administrative Agent to issue any Letter of Credit
and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate, (ii) upon the occurrence and during the continuation of any
Event of Default, Administrative Agent may (and at the written request of
Requisite Class Lenders for Lenders having Revolving Loan Exposure shall),
without notice, suspend all Revolving Loan borrowings with respect to additional
Revolving Loans and/or the incurrence of additional Letters of Credit, whereupon
any additional Revolving Loans and/or additional Letters of Credit shall be made
or incurred in Administrative Agent's sole discretion (or in the sole discretion
of Requisite Class Lenders for Lenders having Revolving Loan Exposure, if such
suspension occurred at their direction), and (iii) upon the occurrence and
during the continuation of any other Event of Default, Administrative Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Company, declare all or any portion of the amounts
described in clauses (a) through (c) above to be, and the same shall forthwith
become, immediately due and payable without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by
Company, and the obligation of each Lender to make any Loan, the obligation of
Administrative Agent to issue any Letter of Credit and the


                                      127



right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate; provided that the foregoing shall not affect in any way the
obligations of Revolving Lenders under subsection 3.3C(i) or the obligations of
Revolving Lenders to purchase assignments of any unpaid Swing Line Loans as
provided in subsection 2.1A(iii).

          Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Security Agreement and shall be applied as therein provided.

          Company hereby further expressly waives (a) all rights to notice and a
hearing prior to Administrative Agent's or Collateral Agent's taking possession
or control of, or to Administrative Agent's or Collateral Agent's replevy,
attachment or levy upon, the Collateral or any bond or security that might be
required by any court prior to allowing Administrative Agent or Collateral Agent
to exercise any of their remedies, and (b) the benefit of all valuation,
appraisal, marshaling and exemption laws.

SECTION 9. ADMINISTRATIVE AGENT AND COLLATERAL AGENT

     9.1  APPOINTMENT.

     A. APPOINTMENT OF ADMINISTRATIVE AGENT AND COLLATERAL AGENT. CS is hereby
appointed Administrative Agent and Collateral Agent hereunder and under the
other Loan Documents, as applicable. Each Lender (including any Lender in its
capacity as a counterparty to a Hedge Agreement with Company or one of its
Subsidiaries) hereby authorizes Administrative Agent and Collateral Agent to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents. Administrative Agent and Collateral Agent agree to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. Except as expressly provided in this Section 9, the provisions of
this Section 9 are solely for the benefit of Administrative Agent, Collateral
Agent and Lenders and no Loan Party shall have rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, Administrative Agent (other than as provided in
subsection 2.1D) shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation towards or relationship of
agency or trust with or for Company or any other Loan Party.

     B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it or Collateral Agent may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being


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referred to herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and
collectively as "SUPPLEMENTAL COLLATERAL AGENTS").

          In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent or Collateral Agent with respect to such Collateral shall
be exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by Administrative Agent, Collateral Agent or such Supplemental
Collateral Agent, and (ii) the provisions of this Section 9 and of subsections
10.2 and 10.3 that refer to Administrative Agent or Collateral Agent shall inure
to the benefit of such Supplemental Collateral Agent and all references therein
to Administrative Agent or Collateral Agent shall be deemed to be references to
Administrative Agent, Collateral Agent and/or such Supplemental Collateral
Agent, as the context may require.

          Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.

     C. CONTROL. Each Lender, Administrative Agent and Collateral Agent hereby
appoint each other Lender as agent for the purpose of perfecting Collateral
Agent's security interest in assets that, in accordance with the UCC, can be
perfected by possession or control.

     9.2  POWERS AND DUTIES; GENERAL IMMUNITY.

     A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes
Administrative Agent and Collateral Agent to take such action on such Lender's
behalf and to exercise such powers, rights and remedies hereunder and under the
other Loan Documents as are specifically delegated or granted to Administrative
Agent and/or Collateral Agent by the terms hereof and thereof, together with
such powers, rights and remedies as are reasonably incidental thereto.
Administrative Agent and Collateral Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Administrative Agent and Collateral Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. Administrative Agent and Collateral Agent shall not have, by reason
of this Agreement or any of the other Loan Documents, a fiduciary relationship
in respect of any Lender or Company; and nothing in this Agreement or any of the
other Loan


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Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Administrative Agent or Collateral Agent any obligations in respect
of this Agreement or any of the other Loan Documents except as expressly set
forth herein or therein.

     B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by such Agent to Lenders or by or on behalf of
Company to such Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.

     C. EXCULPATORY PROVISIONS. No Agent or any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by such Agent under or in connection with any of the Loan Documents except to
the extent caused by such Agent's gross negligence or willful misconduct. An
Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or
any of the other Loan Documents or from the exercise of any power, discretion or
authority vested in it hereunder or thereunder unless and until such Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), such Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions; provided that no Agent shall
be required to take any action that, in its opinion or the opinion of its
counsel, may expose such Agent to liability or that is contrary to any Loan
Document or applicable law. Without prejudice to the generality of the
foregoing, (i) each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication (including any electronic message,
Internet or intranet website posting or other distribution), instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against an Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6).


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     D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, an Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

     9.3  INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR APPRAISAL
          OF CREDITWORTHINESS.

          Each Lender agrees that it has made its own independent investigation
of the financial condition and affairs of Company and its Subsidiaries in
connection with the making of the Loans and the issuance of Letters of Credit
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.

     9.4  RIGHT TO INDEMNITY.

          Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, Collateral Agent, Issuing Lender and Swing Line
Lender and each of their officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements and fees and disbursements of
any financial advisor engaged by Administrative Agent, Collateral Agent, Issuing
Lender or Swing Line Lender) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against Administrative Agent,
Collateral Agent, Issuing Lender or Swing Line Lender, in their capacities as
such, or such other Person in exercising their powers, rights and remedies
hereunder or performing their duties hereunder or under the other Loan Documents
or otherwise in their capacities as Administrative Agent, Collateral Agent,
Issuing Lender or Swing Line Lender, as applicable, in any way relating to or
arising out of this Agreement or the other Loan Documents; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of Administrative Agent, Collateral Agent, Issuing Lender or Swing Line Lender
resulting solely from such Person's gross negligence or willful misconduct as
determined by a


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final judgment of a court of competent jurisdiction. If any indemnity furnished
to Administrative Agent, Collateral Agent, Issuing Lender or Swing Line Lender
or any other such Person for any purpose shall, in the opinion of Administrative
Agent, Collateral Agent, Issuing Lender or Swing Line Lender, as applicable, be
insufficient or become impaired, Administrative Agent, Collateral Agent, Issuing
Lender or Swing Line Lender, as the case may be, may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.

     9.5  RESIGNATION OF AGENTS; SUCCESSOR ADMINISTRATIVE AGENT, COLLATERAL
          AGENT AND SWING LINE LENDER.

     A. RESIGNATION; SUCCESSOR ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Any
Agent may resign at any time by giving 30 days' prior written notice thereof to
Lenders and Company. Upon any such notice of resignation by Administrative Agent
or Collateral Agent, Requisite Lenders shall have the right to appoint a
successor Administrative Agent or Collateral Agent, as applicable, reasonably
acceptable to Company. If no such successor shall have been so appointed by
Requisite Lenders and consented to by Company and shall have accepted such
appointment within 30 days after the retiring Administrative Agent or Collateral
Agent, as applicable, gives notice of its resignation, the retiring
Administrative Agent or Collateral Agent, as applicable, may, on behalf of
Lenders, appoint a successor Administrative Agent or Collateral Agent,
respectively, without the further consent of Requisite Lenders or Company. If
Administrative Agent or Collateral Agent shall notify Lenders and Company that
no Person has accepted such appointment as successor Administrative Agent or
Collateral Agent, as the case may be, such resignation shall nonetheless become
effective in accordance with Administrative Agent's or Collateral Agent's notice
and (i) the retiring Administrative Agent or Collateral Agent shall be
discharged from its duties and obligations under the Loan Documents, except that
any Collateral held by Collateral Agent will continue to be held by it until a
Person shall have accepted the appointment of successor Collateral Agent, and
(ii) all payments, communications and determinations provided to be made by, to
or through Administrative Agent or Collateral Agent, as applicable, shall
instead be made by, to or through each Lender directly, until such time as
Requisite Lenders appoint a successor Administrative Agent or Collateral Agent
and Company shall consent to such appointment in accordance with this subsection
9.5A. Upon the acceptance of any appointment as Administrative Agent or
Collateral Agent hereunder by a successor Administrative Agent or Collateral
Agent, that successor Administrative Agent or Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent or Collateral Agent, as applicable, and the
retiring Administrative Agent or Collateral Agent shall be discharged from its
duties and obligations under this Agreement (if not already discharged as set
forth above). After any retiring Agent's resignation hereunder, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was an Agent under this Agreement.

     B. SUCCESSOR SWING LINE LENDER. Any resignation of Administrative Agent
pursuant to subsection 9.5A shall also constitute the resignation of CS or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 9.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans


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made by the retiring Administrative Agent in its capacity as Swing Line Lender,
(ii) upon such prepayment, the retiring Administrative Agent and Swing Line
Lender shall surrender any Swing Line Note held by it to Company for
cancellation, and (iii) if so requested by the successor Administrative Agent
and Swing Line Lender in accordance with subsection 2.1E, Company shall issue a
Swing Line Note to the successor Administrative Agent and Swing Line Lender
substantially in the form of Exhibit VII annexed hereto, in the amount of the
Swing Line Loan Commitment then in effect and with other appropriate insertions.

     9.6  COLLATERAL DOCUMENTS, SUBSIDIARY GUARANTY AND TERMINATION OF
          INTERCREDITOR AGREEMENT.

          Each Lender (which term shall include, for purposes of this subsection
9.6, any Swap Counterparty) hereby further authorizes Collateral Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party, to be the agent for and representative of Lenders under the
Subsidiary Guaranty and to terminate the Intercreditor Agreement, and each
Lender agrees to be bound by the terms of each Collateral Document and the
Subsidiary Guaranty; provided that Collateral Agent shall not (i) enter into or
consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or the Subsidiary Guaranty or
(ii) release or subordinate any Collateral (except as otherwise expressly
permitted or required pursuant to the terms of this Agreement or the applicable
Collateral Document), in each case without the prior consent of Requisite
Lenders (or, if required pursuant to subsection 10.6, all Lenders); provided
further, however, that, without further written consent or authorization from
Lenders, Collateral Agent may execute any documents or instruments necessary to
(a) release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented, (b) release any Subsidiary Guarantor
from the Subsidiary Guaranty if all of the Equity Interests of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of Company) pursuant to
a sale or other disposition permitted hereunder or to which Requisite Lenders
have otherwise consented or (c) subordinate the Liens of Collateral Agent, on
behalf of Lenders, to any Liens permitted by subsection 7.2A (excluding Liens
described in clause (vii) thereof); provided that, in the case of a sale of such
item of Collateral or stock referred to in subdivision (a) or (b), the
requirements of subsection 10.14 are satisfied. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Administrative Agent,
Collateral Agent and each Lender hereby agree that (1) no Lender shall have any
right individually to realize upon any of the Collateral under any Collateral
Document or to enforce the Subsidiary Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Subsidiary Guaranty may be exercised solely by Collateral Agent for the benefit
of Lenders in accordance with the terms thereof, and (2) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and Collateral Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral


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sold at any such public sale, to use and apply any of the Obligations as a
credit on account of the purchase price for any Collateral payable by Collateral
Agent at such sale.

          Without derogating from any other authority granted to Administrative
Agent or Collateral Agent herein or in the Collateral Documents or any other
document relating thereto, each Lender hereby specifically (i) authorizes
Collateral Agent to enter into pledge agreements pursuant to this subsection 9.6
with respect to the Equity Interests of all existing and future first-tier
Foreign Subsidiaries, which pledge agreements may be governed by the laws of
each of the jurisdictions of formation of such Foreign Subsidiaries, as agent on
behalf of each of Lenders, with the effect that Lenders each become a secured
party thereunder or, where relevant in a jurisdiction, as agent and trustee,
with the effect that Lenders each become a beneficiary of a trust and Collateral
Agent has all the rights, powers, discretions, protections and exemptions from
liability set out in the pledge agreements and (ii) appoints Collateral Agent as
its attorney-in-fact granting it the powers to execute each such pledge
agreement and any registrations of the security interest thereby created, in
each case in its name and on its behalf, with the effect that each Lender
becomes a secured party thereunder. With respect to each such pledge agreement,
Collateral Agent has the power to sub-delegate to third parties its powers as
attorney-in-fact of each Lender

     9.7  DUTIES OF OTHER AGENTS.

          To the extent that any Lender is identified in this Agreement as a
co-agent, documentation agent or syndication agent, such Lender shall not have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender.

     9.8  ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Holdings or any of the Subsidiaries of Holdings,
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Administrative Agent shall have made any demand on
Company) shall be entitled and empowered, by intervention in such proceeding or
otherwise

          (i) to file and prove a claim for the whole amount of principal and
     interest owing and unpaid in respect of the Loans and any other Obligations
     that are owing and unpaid and to file such other papers or documents as may
     be necessary or advisable in order to have the claims of Lenders and Agents
     (including any claim for the reasonable compensation, expenses,
     disbursements and advances of Lenders and Agents and their agents and
     counsel and all other amounts due Lenders and Agents under subsections 2.3
     and 10.2) allowed in such judicial proceeding, and

          (ii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;


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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

          Nothing herein contained shall be deemed to authorize Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

SECTION 10. MISCELLANEOUS

     10.1 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND
          LETTERS OF CREDIT.

     A. GENERAL. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to the further provisions of this
subsection 10.1). Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders (and any attempted assignment or transfer by
Company without such consent shall be null and void). No sale, assignment or
transfer or participation of any Letter of Credit or any participation therein
may be made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Revolving Lender effecting such sale, assignment, transfer or
participation. Anything contained herein to the contrary notwithstanding, except
as provided in subsection 2.1A(iii) and subsection 10.5, the Swing Line Loan
Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described below to any Person other than a successor
Administrative Agent and Swing Line Lender to the extent contemplated by
subsection 9.5. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of Administrative Agent, Collateral
Agent and Lenders and Indemnitees) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

     B. ASSIGNMENTS.

          (i) Amounts and Terms of Assignments. Any Lender may assign to one or
     more Eligible Assignees all or any portion of its rights and obligations
     under this Agreement; provided that (a) except (1) in the case of an
     assignment of the entire remaining amount of the assigning Lender's rights
     and obligations under this Agreement or (2) in the case of an assignment to
     a Lender or an Affiliate of a Lender or an Approved Fund of a Lender, the
     aggregate amount of the Revolving Loan Exposure or Term Loan


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     Exposure, as the case may be, of the assigning Lender and the assignee
     subject to each such assignment shall not be less than $2,500,000, in the
     case of any assignment of a Revolving Loan, or $1,000,000, in the case of
     any assignment of a Term Loan, unless each of Administrative Agent and, so
     long as no Event of Default has occurred and is continuing, Company
     otherwise consent (each such consent not to be unreasonably withheld or
     delayed), (b) each partial assignment shall be made as an assignment of a
     proportionate part of all the assigning Lender's rights and obligations
     under this Agreement with respect to the Loans or Commitments assigned and
     any assignment of all or any portion of a Revolving Loan Commitment,
     Revolving Loans or Letter of Credit participations shall be made only as an
     assignment of the same proportionate part of the assigning Lender's
     Revolving Loan Commitment, Revolving Loans and Letter of Credit
     participations, (c) the parties to each assignment shall (A) electronically
     execute and deliver to Administrative Agent an Assignment Agreement via an
     electronic settlement system acceptable to Administrative Agent or (B)
     manually execute and deliver to Administrative Agent an Assignment
     Agreement, together with a processing and recordation fee of $3,500, and
     the Eligible Assignee, if it shall not already be a party to this
     Agreement, shall deliver to Administrative Agent information reasonably
     requested by Administrative Agent, including an administrative
     questionnaire and such forms, certificates or other evidence, if any, with
     respect to United States federal income tax withholding matters as the
     assignee under such Assignment Agreement may be required to deliver to
     Administrative Agent pursuant to subsection 2.7B(iv) and with respect to
     information requested under the Patriot Act, and (d) Administrative Agent,
     and if no Event of Default has occurred and is continuing, Company, and, in
     the case of the assignment of Revolving Loans or Revolving Loan
     Commitments, any Issuing Lender and Swingline Lender, shall have consented
     thereto (which consents shall not be unreasonably withheld or delayed);
     provided that, (I) with respect to the Term Loans, in the case of an
     assignment to an Eligible Assignee, no consent of Company shall be
     required, (II) with respect to the Revolving Loans and Revolving Loan
     Commitments, no consent of Company shall be required in the case of any
     assignment to a Lender, any Affiliate of a Lender or any Approved Fund of a
     Lender and (III) no consent of Company shall be required in connection with
     any assignment relating to the primary allocation or syndication of the
     Loans and Commitments by CS to Eligible Assignees that are either organized
     under the laws of the United States or are qualified to do business in one
     or more states of the United States.

               Upon acceptance and recording by Administrative Agent pursuant to
     clause (ii) below, from and after the effective date specified in such
     Assignment Agreement, (y) the assignee thereunder shall be a party hereto
     and, to the extent that rights and obligations hereunder have been assigned
     to it pursuant to such Assignment Agreement, shall have the rights and
     obligations of a Lender hereunder and shall be deemed to have made all of
     the agreements of a Lender contained in the Loan Documents arising out of
     or otherwise related to such rights and obligations and (z) the assigning
     Lender thereunder shall, to the extent that rights and obligations
     hereunder have been assigned by it pursuant to such Assignment Agreement,
     relinquish its rights (other than any rights which survive the termination
     of this Agreement under subsection 10.9B) and


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     be released from its obligations under this Agreement (and, in the case of
     an Assignment Agreement covering all or the remaining portion of an
     assigning Lender's rights and obligations under this Agreement, such Lender
     shall cease to be a party hereto; provided that, anything contained in any
     of the Loan Documents to the contrary notwithstanding, if such Lender is an
     Issuing Lender such Lender shall continue to have all rights and
     obligations of an Issuing Lender until the cancellation or expiration of
     any Letters of Credit issued by it and the reimbursement of any amounts
     drawn thereunder). The assigning Lender shall, upon the effectiveness of
     such assignment or as promptly thereafter as practicable, surrender its
     Notes, if any, to Administrative Agent for cancellation, and thereupon new
     Notes shall, if so requested by the assignee and/or the assigning Lender in
     accordance with subsection 2.1E, be issued to the assignee and/or to the
     assigning Lender, substantially in the form of Exhibit IV or Exhibit VI
     annexed hereto, as the case may be, with appropriate insertions, to reflect
     the amounts of the new Commitments and/or outstanding Revolving Loans
     and/or outstanding Term Loans, as the case may be, of the assignee and/or
     the assigning Lender. Other than as provided in subsection 2.1A(iii) and
     subsection 10.5, any assignment or transfer by a Lender of rights or
     obligations under this Agreement that does not comply with this subsection
     10.1B shall be treated for purposes of this Agreement as a sale by such
     Lender of a participation in such rights and obligations in accordance with
     subsection 10.1C.

          (ii) Acceptance by Administrative Agent; Recordation in Register. Upon
     its receipt of an Assignment Agreement executed by an assigning Lender and
     an assignee representing that it is an Eligible Assignee, together with the
     processing and recordation fee referred to in subsection 10.1B(i) and any
     forms, certificates or other evidence with respect to United States federal
     income tax withholding matters that such assignee may be required to
     deliver to Administrative Agent pursuant to subsection 2.7B(iv),
     Administrative Agent shall, if Administrative Agent and Company have
     consented to the assignment evidenced thereby (in each case to the extent
     such consent is required pursuant to subsection 10.1B(i)), (a) accept such
     Assignment Agreement by executing a counterpart thereof as provided therein
     (which acceptance shall evidence any required consent of Administrative
     Agent to such assignment) and (b) record the information contained therein
     in the Register. Administrative Agent shall maintain a copy of each
     Assignment Agreement delivered to and accepted by it as provided in this
     subsection 10.1B(ii). No assignment shall be effective for purposes of this
     Agreement unless it has been recorded in the Register as provided in this
     clause (ii).

          (iii) Deemed Consent by Company. If the consent of Company to an
     assignment or to an Eligible Assignee is required hereunder (including a
     consent to an assignment which does not meet the minimum assignment
     thresholds specified in subsection 10.1B(i)), Company shall be deemed to
     have given its consent five Business Days after the date written notice
     thereof has been delivered by the assigning Lender (through Administrative
     Agent or the electronic settlement system used in connection with any such
     assignment) unless such consent is expressly refused by Company prior to
     such fifth Business Day.


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          (iv) Special Purpose Funding Vehicles. Notwithstanding anything to the
     contrary contained herein, any Lender (a "GRANTING LENDER") may grant to a
     special purpose funding vehicle (a "SPC"), identified as such in writing
     from time to time by the Granting Lender to Administrative Agent and
     Company, the option to provide to Company all or any part of any Loan that
     such Granting Lender would otherwise be obligated to make to Company
     pursuant to this Agreement; provided that (i) nothing herein shall
     constitute a commitment by any SPC to make any Loan, and (ii) if an SPC
     elects not to exercise such option or otherwise fails to provide all or any
     part of such Loan, the Granting Lender shall be obligated to make such Loan
     pursuant to the terms hereof. The making of a Loan by an SPC hereunder
     shall utilize the Commitment of the Granting Lender to the same extent, and
     as if, such Loan were made by such Granting Lender. Each party hereto
     hereby agrees that no SPC shall be liable for any indemnity or similar
     payment obligation under this Agreement (all liability for which shall
     remain with the Granting Lender). In furtherance of the foregoing, each
     party hereto hereby agrees (which agreement shall survive the termination
     of this Agreement) that, prior to the date that is one year and one day
     after the payment in full of all outstanding commercial paper or other
     senior indebtedness of any SPC, it will not institute against, or join any
     other person in instituting against, such SPC any bankruptcy,
     reorganization, arrangement, insolvency or liquidation proceedings under
     the laws of the United States or any state thereof. In addition,
     notwithstanding anything to the contrary contained in this subsection
     10.1B(iv), any SPC may (i) with notice to, but without the prior written
     consent of, Company and Administrative Agent and without paying any
     processing fee therefor, assign all or a portion of its interests in any
     Loans to the Granting Lender or to any financial institutions (consented to
     by Company and Administrative Agent) providing liquidity and/or credit
     support to or for the account of such SPC to support the funding or
     maintenance of Loans and (ii) disclose on a confidential basis any
     non-public information relating to its Loans to any rating agency,
     commercial paper dealer or provider of any surety, guarantee or credit or
     liquidity enhancement to such SPC. This subsection 10.1B(iv) may not be
     amended without the written consent of the SPC.

     C. PARTICIPATIONS. Any Lender may, without the consent of, or notice to,
Company or Administrative Agent, sell participations to one or more Persons
(other than a natural Person or Company or any of its Affiliates) in all or a
portion of such Lender's rights and/or obligations under this Agreement;
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Company, Administrative
Agent, Collateral Agent and Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver directly affecting (i) the
extension of the regularly scheduled maturity of any portion of the principal
amount of or interest on any Loan allocated to such participation, (ii) a
reduction of the principal amount of, or the rate of interest payable on, or any
fees with respect to, any Loan


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allocated to such participation, (iii) the release of all or substantially all
of the Subsidiary Guarantors from their obligations under the Subsidiary
Guaranty or the release of any Lien granted in favor of Collateral Agent with
respect to all or substantially all of the Collateral, or (iv) the increase in
the commitment allocated to any such Participant. Subject to the further
provisions of this subsection 10.1C, Company agrees that each Participant shall
be entitled to the benefits of subsections 2.6D and 2.7 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
subsection 10.1B. To the extent permitted by law, each Participant also shall be
entitled to the benefits of subsection 10.4 as though it were a Lender, provided
such Participant agrees to be subject to subsection 10.5 as though it were a
Lender. A Participant shall not be entitled to receive any greater payment under
subsections 2.6D and 2.7 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with Company's prior
written consent. A Participant that would be a Non-US Lender if it were a Lender
shall not be entitled to the benefits of subsection 2.7 unless Company is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Company, to comply with subsection 2.7B(iv) as though
it were a Lender.

     D. PLEDGES AND ASSIGNMENTS. Any Lender may at any time (1) pledge or assign
a security interest in all or any portion of its Loans, and the other
Obligations owed to such Lender, to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to any Federal
Reserve Bank and (2) transfer its rights to receive payments hereunder to one or
more of its Affiliates; provided that (i) no Lender shall be relieved of any of
its obligations hereunder as a result of any such assignment, pledge or transfer
and (ii) in no event shall any assignee, pledgee or transferee be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.

     E. INFORMATION. Each Lender may furnish any information concerning Holdings
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.19.

     F. AGREEMENTS OF LENDERS. Each Lender listed on the signature pages hereof
hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase its Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 10.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control). Each Lender that becomes a party
hereto pursuant to an Assignment Agreement shall also be deemed to represent
that such Assignment Agreement constitutes a legal, valid and binding obligation
of such Lender, enforceable against such Lender in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity.


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     10.2 EXPENSES.

          Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all reasonable costs and
expenses of Administrative Agent in the negotiation, preparation and execution
of the Loan Documents and any consents, amendments, waivers or other
modifications thereto; (ii) all reasonable costs and expenses of furnishing all
opinions by counsel for Company (including any opinions requested by Agents or
Lenders as to any legal matters arising hereunder) and of Company's performance
of and compliance with all agreements and conditions on its part to be performed
or complied with under this Agreement and the other Loan Documents including
with respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) all reasonable fees, expenses and disbursements of counsel
to Agents (including reasonable allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all costs
and expenses of creating and perfecting Liens in favor of Collateral Agent on
behalf of Lenders pursuant to any Collateral Document, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent, Collateral Agent and of counsel providing any
opinions that Administrative Agent, Collateral Agent or Requisite Lenders may
reasonably request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all reasonable costs and expenses (including the
reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Administrative Agent or its counsel) of obtaining and
reviewing any appraisals provided for under subsection 6.9B and any
environmental audits or reports provided for under subsection 6.9A; (vi) all
reasonable costs and expenses incurred by Collateral Agent in connection with
the custody or preservation of any of the Collateral; (vii) all other reasonable
costs and expenses incurred by Administrative Agent and Lead Arranger in
connection with the syndication of the Commitments; (viii) all reasonable costs
and expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and fees, costs and expenses of accountants, advisors and
consultants, incurred by Administrative Agent or Collateral Agent and its
counsel relating to efforts to (a) evaluate or assess any Loan Party, its
business or financial condition and (b) protect, evaluate, assess or dispose of
any of the Collateral; and (ix) all reasonable costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel),
fees, costs and expenses of accountants, advisors and consultants and costs of
settlement, incurred by Agents and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Loan
Documents) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.

     10.3 INDEMNITY.

          In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend


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(subject to Indemnitees' selection of counsel), indemnify, pay and hold harmless
Agents and Lenders (including Issuing Lenders), and the officers, directors,
trustees, employees, agents, advisors, successors and assigns, controlling
persons, members, Affiliates and other representatives of Agents and Lenders
(collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final nonappealable judgment of a court of competent jurisdiction. In the
case of an investigation, litigation or proceeding to which the indemnity in
this subsection 10.3 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by Company, any equity
holders or creditors of Company, or an Indemnitee, whether or not an Indemnitee
is otherwise a party thereto and whether or not any aspect of the Transactions
or payment of the Acquisition Transaction Costs are consummated.

          As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), reasonable costs (including the reasonable costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity), reasonable expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees (including reasonable allocated costs of internal counsel) in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations, foreign assets control executive orders and
regulations of the Treasury Department, and Environmental Laws), on common law
or equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, the failure of an Issuing Lender to honor a drawing
under a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Government Authority, or
any enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty)), (ii) the statements contained in the commitment letter
delivered by any Lender to Company with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries.


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          To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.

          Company hereby agrees that no Indemnitee shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to Company or any
of its Subsidiaries or Affiliates or to equity holders or creditors of Company
arising out of, related to or in connection with any aspect of the Transactions,
except only for direct (as opposed to special, indirect, consequential or
punitive) damages determined in a final nonappealable judgment by a court of
competent jurisdiction to have resulted primarily from such Indemnitee's gross
negligence or willful misconduct.

     10.4 SET-OFF.

          In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuation of any Event of Default each of Lenders and their
Affiliates is hereby authorized by Company at any time or from time to time,
without notice to Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, provisional or final, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender or any Affiliate of that Lender to or for the credit or the
account of Company and each other Loan Party against and on account of the
Obligations of Company or any other Loan Party then due and owing to that Lender
(or any Affiliate of that Lender) or to any other Lender (or any Affiliate of
any other Lender) under this Agreement, the Letters of Credit and participations
therein and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not that Lender shall have made any demand hereunder and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.

     10.5 RATABLE SHARING.

          Lenders hereby agree among themselves that if any of them shall,
whether by voluntary or mandatory payment (other than a payment or prepayment of
Loans made and applied in accordance with the terms of this Agreement), by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then due
and owing to that Lender hereunder or under the other Loan Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) that is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall, unless


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such proportionately greater payment is required by the terms of this Agreement,
(i) notify Administrative Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase assignments (which
it shall be deemed to have purchased from each seller of an assignment
simultaneously upon the receipt by such seller of its portion of such payment)
of the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that (A) if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such assignments shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest and (B) the foregoing provisions
shall not apply to (1) any payment made by Company pursuant to and in accordance
with the express terms of this Agreement or (2) any payment obtained by a Lender
as consideration for the assignment (other than an assignment pursuant to this
subsection 10.5) of or the sale of a participation in any of its Obligations to
any Eligible Assignee or Participant pursuant to subsection 10.1B. Company
expressly consents to the foregoing arrangement and agrees that any purchaser of
an assignment so purchased may exercise any and all rights of a Lender as to
such assignment as fully as if that Lender had complied with the provisions of
subsection 10.1B with respect to such assignment. In order to further evidence
such assignment (and without prejudice to the effectiveness of the assignment
provisions set forth above), each purchasing Lender and each selling Lender
agree to enter into an Assignment Agreement at the request of a selling Lender
or a purchasing Lender, as the case may be, in form and substance reasonably
satisfactory to each such Lender.

     10.6 AMENDMENTS AND WAIVERS.

          No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that no such amendment, modification, termination,
waiver or consent shall, without the consent of:

               (a) each Lender with Obligations directly affected (whose consent
          shall be sufficient for any such amendment, modification, termination
          or waiver without the consent of Requisite Lenders) (1) reduce the
          principal amount of any Loan, (2) postpone the scheduled final
          maturity date of any Loan or postpone the date or reduce the amount of
          any scheduled payment (but not prepayment) of principal of any Loan,
          (3) postpone the date on which any interest or any fees are payable,
          (4) decrease the interest rate borne by any Loan (other than any
          waiver of any increase in the interest rate applicable to any of the
          Loans pursuant to subsection 2.2E) or the amount of any fees payable
          hereunder (other than any waiver of any increase in the fees
          applicable to Letters of Credit pursuant to subsection 3.2 following
          an Event of Default) excluding any change in the manner in which any
          financial ratio used in determining any interest rate or fee is
          calculated that would result in a reduction of any such rate or fee,
          (5) reduce the amount or postpone the due date of any amount payable
          in respect of any Letter of Credit, (6) extend the expiration date of
          any Letter of Credit beyond the Revolving Loan Commitment Termination
          Date, (7) extend the Revolving


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          Commitment Termination Date or (8) change in any manner the
          obligations of Revolving Lenders relating to the purchase of
          participations in Letters of Credit;

               (b) each Lender, (1) change in any manner the definition of
          "Class" or the definition of "Pro Rata Share" or the definition of
          "Requisite Class Lenders" or the definition of "Requisite Lenders"
          (except for any changes resulting solely from an increase in the
          aggregate amount of the Commitments approved by Requisite Lenders),
          (2) change in any manner any provision of this Agreement that, by its
          terms, expressly requires the approval or concurrence of all Lenders,
          (3) increase the maximum duration of Interest Periods permitted
          hereunder, (4) release any Lien granted in favor of Collateral Agent
          with respect to all or substantially all of the Collateral or release
          Holdings from its obligations under the Holdings Security Agreement or
          release all or substantially all of the Subsidiary Guarantors from
          their obligations under the Subsidiary Guaranty, in each case other
          than in accordance with the terms of the Loan Documents, or (5) change
          in any manner or waive the provisions contained in subsection 8.1 or
          this subsection 10.6.

          In addition, no amendment, modification, termination or waiver of any
provision (i) of subsection 2.1A(iii) or of any other provision of this
Agreement relating to the Swing Line Loan Commitment or the Swing Line Loans
shall be effective without the written concurrence of Swing Line Lender, (ii) of
Section 3 shall be effective without the written concurrence of Administrative
Agent and, with respect to the purchase of participations in Letters of Credit,
without the written concurrence of each Issuing Lender that has issued an
outstanding Letter of Credit or has not been reimbursed for a payment under a
Letter of Credit, (iii) of Section 9 or of any other provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of
Administrative Agent or Collateral Agent, as applicable, shall be effective
without the written concurrence of Administrative Agent or Collateral Agent, as
applicable, (iv) of subsection 2.4 that has the effect of changing any voluntary
or mandatory prepayments, or Commitment reductions applicable to a Class in a
manner that disproportionately disadvantages such Class relative to any other
Class shall be effective without the written concurrence of Requisite Class
Lenders of such affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any such provision which only
postpones or reduces any interim scheduled payment, voluntary or mandatory
prepayment, or Commitment reduction from those set forth in subsection 2.4 with
respect to one Class but not any other Class shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage any such other Class for purposes of this clause (iv)); (v) of
Section 8 that has the effect of obligating Revolving Lenders to make Revolving
Loans during the occurrence and continuation of an Event of Default shall be
effective without the written concurrence of Requisite Class Lenders having
Revolving Loan Exposure; (vi) that increases the amount of a Commitment of a
Lender shall be effective without the consent of such Lender; and (vii) that
increases the maximum amount of Letters of Credit shall be effective without the
consent of Revolving Lenders constituting Requisite Class Lenders.

          Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that


                                      144



Lender. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Company in any case shall entitle Company to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.

     10.7 INDEPENDENCE OF COVENANTS.

          All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

     10.8 NOTICES; EFFECTIVENESS OF SIGNATURES.

          Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile in complete and legible
form, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to Administrative
Agent, Swing Line Lender and any Issuing Lender shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or (i) as to
Company and Administrative Agent, such other address as shall be designated by
such Person in a written notice delivered to the other parties hereto and (ii)
as to each other party, such other address as shall be designated by such party
in a written notice delivered to Administrative Agent. Electronic mail and
Internet and intranet websites may be used to distribute routine communications,
such as financial statements and other information as provided in subsection
6.1. Administrative Agent or Company may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

          Loan Documents and notices under the Loan Documents may be transmitted
and/or signed by telefacsimile and by signatures delivered in 'PDF' format by
electronic mail; provided, however, that no signature with respect to any
notice, request, agreement, waiver, amendment or other document that is intended
to have binding effect may be sent by electronic mail. The effectiveness of any
such documents and signatures shall, subject to applicable law, have the same
force and effect as an original copy with manual signatures and shall be binding
on all Loan Parties, Agents and Lenders. Administrative Agent may also require
that any such documents and signature be confirmed by a manually-signed copy
thereof; provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.


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     10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

     A. All representations, warranties and agreements made herein shall survive
the execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.

     B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 10.2,
10.3, 10.4, 10.17 and 10.18 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5 and 10.18 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.

     10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

          No failure or delay on the part of an Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

     10.11 MARSHALLING; PAYMENTS SET ASIDE.

          Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.

     10.12 SEVERABILITY.

          In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.


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     10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS; DAMAGE
          WAIVER.

          The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and, subject to subsection 9.6, each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

          To the extent permitted by law, Company shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with or as a result of this
Agreement (including, without limitation, subsection 2.1C hereof), any other
Loan Document, any transaction contemplated by the Loan Documents, any Loan or
the use of proceeds thereof. No Indemnitee shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with the Loan Documents or the
transactions contemplated thereby.

     10.14 RELEASE OF SECURITY INTEREST OR GUARANTY.

          Upon the proposed sale or other disposition (other than the
Acquisition) of any Collateral to any Person (other than an Affiliate of
Company) that is permitted by this Agreement or to which Requisite Lenders have
otherwise consented, or the sale or other disposition of all of the Equity
Interests of a Subsidiary Guarantor to any Person (other than an Affiliate of
Company) that is permitted by this Agreement or to which Requisite Lenders have
otherwise consented, for which a Loan Party desires to obtain a security
interest release or a release of the Subsidiary Guaranty from Collateral Agent,
such Loan Party shall deliver an Officer's Certificate (i) stating that the
Collateral or the Equity Interests subject to such disposition is being sold or
otherwise disposed of in compliance with the terms hereof and (ii) specifying
the Collateral or Equity Interests being sold or otherwise disposed of in the
proposed transaction. Upon the receipt of such Officer's Certificate, Collateral
Agent shall, at such Loan Party's expense, so long as Collateral Agent (a) has
no reason to believe that the facts stated in such Officer's Certificate are not
true and correct and (b), if the sale or other disposition of such item of
Collateral or Equity Interests constitutes an Asset Sale, shall have received
evidence reasonably satisfactory to it that arrangements reasonably satisfactory
to it have been made for delivery of the Net Asset Sale Proceeds if and as
required by subsection 2.4, execute and deliver such releases of its security
interest in such Collateral or such Subsidiary Guaranty, as may be reasonably
requested by such Loan Party.


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     10.15 APPLICABLE LAW.

          THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.

     10.16 CONSTRUCTION OF AGREEMENT; NATURE OF RELATIONSHIP.

          Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender or
other Agent has any fiduciary relationship with or duty to Company arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

     10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

          ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
HEREUNDER AND THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY

          (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
     JURISDICTION AND VENUE OF SUCH COURTS;

          (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

          (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
     SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
     REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
     10.8;

          (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
     SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER


                                      148



     COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
     EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

          (V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
     MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
     COURTS OF ANY OTHER JURISDICTION; AND

          (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
     JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
     EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
     OTHERWISE.

     10.18 WAIVER OF JURY TRIAL.

          EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.


                                      149



     10.19 CONFIDENTIALITY.

          Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature, it being
understood and agreed by Holdings and Company that in any event a Lender may
make disclosures (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential), (b) to the extent requested by any Government
Authority having jurisdiction over such Lender, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this subsection 10.19, to (i) any
Eligible Assignee of or participant in, or any prospective Eligible Assignee of
or Participant in, any of its rights or obligations under this Agreement or (ii)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of
Holdings or Company, (g) with the consent of Holdings and Company, (h) to the
extent such information (i) becomes publicly available other than as a result of
a breach of this subsection 10.19 or (ii) becomes available to Administrative
Agent or any Lender on a nonconfidential basis from a source other than Holdings
or Company or (i) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that
requires access to information about a Lender's or its Affiliates' investment
portfolio in connection with ratings issued with respect to such Lender or its
Affiliates; provided that, unless specifically prohibited by applicable law or
court order, each Lender shall notify Holdings and Company of any request by any
Government Authority or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such Government Authority) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further that in no event
shall any Lender be obligated or required to return any materials furnished by
Holdings or any of its Subsidiaries. In addition, Administrative Agent and
Lenders may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to Administrative Agent and Lenders, and
Administrative Agent or any of its Affiliates may place customary "tombstone"
advertisements relating hereto in publications (including publications
circulated in electronic form) of its choice at its own expense.

          Notwithstanding anything herein to the contrary, information required
to be treated as confidential by reason of the foregoing shall not include, and
Administrative Agent and each Lender may disclose to any and all Persons,
without limitation of any kind, any information with respect to United States
federal income tax treatment and United States federal income tax structure of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to Administrative Agent or
such Lender relating to such tax treatment and tax structure.


                                      150



     10.20 COUNTERPARTS; EFFECTIVENESS.

          This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith 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. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

     10.21 AMENDMENT AND RESTATEMENT; RELEASES

          A. AMENDMENT AND RESTATEMENT.

          On the Effective Date upon satisfaction of the conditions set forth in
subsection 4.1 hereof, the Term Loans, Revolving Loan Commitments, Revolving
Loans, Letter of Credit participations, in each case, under the Existing First
Lien Credit Agreement shall thereupon be immediately amended and restated in
their entirety as Term Loan Commitments, Term Loans, Revolving Loan Commitments,
Revolving Loans and, Letter of Credit participations hereunder and shall be
governed by the terms of this Agreement all as more particularly described
herein. The Lenders are not subject to or bound by any of the terms or
provisions of the Existing First Lien Credit Agreement. The parties acknowledge
and agree that this Agreement and the other Loan Documents do not constitute a
novation, payment and reborrowing, or termination of any of the obligations of
Company under the Existing First Lien Credit Agreement and that all such
obligations are in all respects continued and outstanding as obligations under
this Agreement and the Notes with only the terms being modified from and after
the Effective Date as provided in this Agreement, the Notes and the other Loan
Documents. In addition, this Agreement shall not release, limit or impair in any
way the priority of any security interests and liens held by Administrative
Agent and Collateral Agent for the benefit of the Lenders against any assets of
Company or any of Company's Subsidiaries arising under the Existing First Lien
Credit Agreement or the other Existing First Lien Loan Documents. In the event
that the Effective Date does not occur on or before February 10, 2006, the
Existing First Lien Credit Agreement shall continue in full force and effect and
this Agreement shall be null and void and of no force and effect.

          B. RELEASE.

          (i) Company hereby acknowledges and agrees that, as of the Effective
     Date, no right of offset, defense, counterclaim, claim, causes of action or
     objection in favor of Company or any Loan Party against the Lenders
     (including all lenders prior to the Effective Date) or Administrative
     Agent, any other Agent or the Issuing Lender exists arising out of or with
     respect to (x) the Obligations, this Agreement, any of the other Loan
     Documents, the Existing First Lien Credit Agreement or any other Existing
     First Lien Loan Documents; (y) any other documents evidencing, securing or
     in any way


                                      151



     relating to the foregoing, or (z) the administration or funding of the
     Loans, the Term Loan Commitment, the Revolving Loan Commitment or the
     issuance of Letters of Credit.

          (ii) Company hereby expressly waives, releases and relinquishes any
     and all offsets, defenses, claims, counterclaims, causes of action or
     objections, if any, against such Lenders, Administrative Agent, the other
     Agents or the Issuing Lender, whether known or unknown, both at law and in
     equity, only to the extent arising out of any matter, cause or event
     occurring prior to the effectiveness of this amended and restatement.

          (iii) Company for itself, each other Loan Party and their respective
     successors and assigns in interest and any person that may derivatively or
     otherwise assert a claim through or by any of the foregoing to the fullest
     extent permitted by applicable law (collectively, the "RELEASORS") waives
     and releases against Agents and each Lender and each of their respective
     employees, agents, representatives, consultants, attorneys, fiduciaries,
     servants, officers, directors, partners, predecessors, successors and
     assigns, subsidiary corporations, parent corporations, related corporate
     divisions, participants and assigns (collectively, the "RELEASEES"), and
     covenants not to commence or pursue any litigation or action, claims,
     demands, causes of action, suits, debts, sums of money, accounts, bonds,
     bills, covenants, contracts, controversies, agreements, promises, setoffs,
     recoupments, counterclaims, defenses, expenses, damages and/or judgments,
     whatsoever in law or in equity (whether matured, unmatured, contingent or
     non-contingent) that (x) arose prior to the effectiveness of this amendment
     and restatement or arose out of any matter, cause or event that occurred
     prior to the effectiveness of this amendment and restatement and (y) relate
     in any way, either directly or indirectly, to this Agreement, any Loan
     Documents, the transactions contemplated thereby or any action by Agents,
     Lenders or any other Releasee in any way related thereto, whether known or
     unknown, which each of the Releasors had or now has. Company hereby agrees
     that federal or state laws, rights, rules or legal principles of any other
     jurisdiction which may be applicable thereto, to the extent that they apply
     to the matters released hereby, are knowingly and voluntarily waived and
     relinquished by such Releasors, to the full extent that such rights and
     benefits pertaining to the matters released herein may be waived, and
     Company hereby agrees and acknowledges that this waiver is an essential
     term of this Agreement, without which Agents and Lenders would not have
     entered into this Agreement. Company represents and warrants that it has
     not transferred, assigned, pledged or otherwise conveyed any of its right,
     title or interest in any matter released hereby to any other Person. In
     connection with the release in this Agreement, Company acknowledges that it
     is aware it may hereafter discover claims presently unknown or unsuspected,
     or facts in addition to or different from those which such Loan Parties now
     knows or believes to be true, with respect to the matters released herein.
     Nevertheless, it is Company's intent in executing this Agreement to fully,
     finally and forever release and settle such matters. In making this
     release, Company has consulted with counsel concerning the effect thereof.

                  [Remainder of page intentionally left blank]


                                      152



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement 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.,
                                        a Delaware corporation


                                        By:
                                            ------------------------------------
                                        Name: Roland G. Rapp
                                        Title: Chief Administrative Officer

                                        Notice Address:
                                           27442 Portola Parkway, Suite 200
                                           Foothill Ranch, CA 92610
                                           Attention:
                                                      --------------------------
                                           Facsimile:
                                                      --------------------------


                                      S-1



                                        HOLDINGS:

                                        SHG HOLDING SOLUTIONS, INC.,
                                        a Delaware corporation


                                        By:
                                            ------------------------------------
                                        Name: [Roland G. Rapp]
                                        Title: [Chief Administrative Officer]

                                        Notice Address:
                                           27442 Portola Parkway, Suite 200
                                           Foothill Ranch, CA 92610
                                           Attention:
                                                      --------------------------
                                           Facsimile:
                                                      --------------------------


                                      S-2



                                        LENDERS:

                                        CREDIT SUISSE,
                                        Cayman Islands Branch (formerly known as
                                        Credit Suisse First Boston, acting
                                        through its Cayman Islands Branch),
                                        individually as a Lender and as
                                        Administrative Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Notice Address:
                                           Eleven Madison Avenue, OMA-2
                                           New York, New York 10010
                                           Attention: Mark Waldron
                                           Facsimile: (212) 325-8304

                                        Payment Instructions:
                                           Bank of New York
                                           ABA 021000018
                                           A/C Name: CS Agency Cayman Account
                                           A/C Number: 8900492627
                                           Reference: [__________]


                                      S-3



                                        [LENDER NAME],
                                        as a Lender


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        Notice Address:

                                           -------------------------------------

                                           -------------------------------------
                                           Attention:
                                                      --------------------------
                                           Facsimile:
                                                      --------------------------


                                      S-4



                                  SCHEDULE 2.1

                       LENDERS' REVOLVING LOAN COMMITMENTS



         Revolving Loan Commitment   Revolving Loan Commitment
           prior to effectiveness       after effectiveness
Lender        of this Agreement          of this Agreement
- ------   -------------------------   -------------------------
                               
                   $_____                     $_____
                   ------                     ------
TOTAL              $_____                     $_____



                           Schedule 2.1-1

EX-10.4

                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT

     This Employment Agreement dated as of December 27, 2005 (the "Agreement"),
is made by and between Skilled Healthcare Group, Inc., a Delaware corporation
(together with any successor thereto, the "Company") and Boyd W. Hendrickson
(the "Executive").

                                    RECITALS

A.   It is the desire of the Company to assure itself of the continued services
     of the Executive by entering into this Agreement.

B.   The Executive and the Company mutually desire that Executive provide
     services to the Company on the terms herein provided.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

1.   EMPLOYMENT.

     (a)  General. The Company shall employ the Executive and the Executive
          shall enter the employ of the Company, for the period set forth in
          Section 1(b), in the position set forth in Section 1(c), and upon the
          other terms and conditions herein provided.

     (b)  Employment Term. The initial term of employment under this Agreement
          (the "Initial Term") shall be for the period beginning on the Closing,
          as such term is defined in the Agreement and Plan of Merger (the
          "Merger Agreement"), dated as of October 22, 2005 among the Company,
          SHG Holding Solutions, Inc., a Delaware corporation ("Parent"), SHG
          Acquisition Corp., a Delaware corporation, Heritage Partners
          Management Company, LLP, Heritage Fund II, L.P., a Delaware limited
          partnership, and Heritage Investors II, L.L.C., a Delaware limited
          liability company (the date of such Closing is the "Effective Date")
          and ending on (and including) the third anniversary thereof, unless
          earlier terminated as provided in Section 3. Should the Closing not
          occur, this Agreement shall be null and void and shall not become
          effective. The employment term hereunder shall automatically be
          extended for successive one-year periods ("Extension Terms" and,
          collectively with the Initial Term, the "Term") unless either party
          gives written notice of non-extension to the other no later than sixty
          (60) days prior to the expiration of the then-applicable Term and
          subject to earlier termination as provided in Section 3.

     (c)  Position and Duties. The Executive shall serve as the Chairman of the
          Board and Chief Executive Officer of the Company with such customary
          responsibilities, duties and authority as may from time to time be
          assigned to the Executive by the Board of Directors of the Company
          (the "Board") or by the Board of Directors of Parent. The Executive
          shall devote substantially all his working time and efforts





          to the business and affairs of the Company (which may include service
          to Parent, the Company and their respective direct and indirect
          subsidiaries). The Executive agrees to observe and comply with the
          rules and policies of the Company as adopted by or under the authority
          of the Board from time to time. During the Term, it shall not be a
          violation of this Agreement for the Executive to serve on industry
          trade, civic or charitable boards or committees and manage his
          personal investments and affairs, as long as such activities do not
          materially interfere with the performance of the Executive's duties
          and responsibilities as an employee of the Company. During his
          employment and following termination of his employment with the
          Company, the Executive agrees not to disparage the Company, any of its
          products or practices, or any of its directors, officers, agents,
          representatives, stockholders or affiliates, either orally or in
          writing.

     (d)  Location. The Executive acknowledges that the Company's principal
          executive offices are currently located at Foothill Ranch, California.
          The Executive shall operate principally out of such executive offices,
          as they may be moved from time to time within 40 miles of their
          current location in Foothill Ranch, California. The Company expects,
          and the Executive agrees, that the Executive shall be required to
          travel from time to time in order to fulfill his duties to the
          Company.

2.   COMPENSATION AND RELATED MATTERS.

     (a)  Annual Base Salary. During the Term, the Executive shall receive a
          base salary at a rate of $560,000 per annum (the "Annual Base
          Salary"), which shall be paid in accordance with the customary payroll
          practices of the Company, subject to upward adjustment as may be
          determined by the Board in its discretion.

     (b)  Annual Bonus. During the Term, the Executive will be eligible to
          participate in an annual performance-based bonus plan established by
          the Board that provides an opportunity substantially the same as the
          bonus plan first adopted by the Board after the Effective Date.

     (c)  Restricted Stock Plan. During the Term, the Executive shall be
          entitled to participate in the equity plan (the "Restricted Stock
          Plan") of Parent pursuant to which, on the Effective Date, the
          Executive shall receive a number of shares of common stock of Parent
          equal to 3.4375% of the number of shares of common stock of Parent
          outstanding on the Effective Date, excluding shares issued under the
          Restricted Stock Plan. Restricted Stock shall vest as to 25% of the
          shares granted on the Effective Date and each of the first three
          anniversaries of the Effective Date, but only to the extent the
          Executive remains continuously employed by the Company through the
          applicable vesting date.

     (d)  Benefits. During the Term, the Executive shall be entitled to
          participate in group medical insurance, 401(k) and other standard
          benefits provided by the Company, as may be amended from time to time,
          which are applicable to the senior officers of the Company.


                                        2



     (e)  Vacation. During the Term, the Executive shall be entitled to four
          weeks paid vacation per calendar year and the maximum unused vacation
          time that the Executive may accrue is eight weeks. Any vacation shall
          be taken at the reasonable and mutual convenience of the Company and
          the Executive.

     (f)  Expenses. During the Term, the Company shall reimburse the Executive
          for all reasonable travel and other business expenses incurred by him
          in the performance of his duties to the Company in accordance with the
          Company's expense reimbursement policy.

     (g)  Key Person Insurance. At any time during the Term, the Company shall
          have the right to insure the life of the Executive for the Company's
          sole benefit. The Company shall have the right to determine the amount
          of insurance and the type of policy. The Executive shall cooperate
          with the Company in obtaining such insurance by submitting to physical
          examinations, by supplying all information reasonably required by any
          insurance carrier, and by executing all necessary documents reasonably
          required by any insurance carrier. The Executive shall incur no
          financial obligation by executing any required document, and shall
          have no interest in any such policy.

     (h)  Medical Examination. During the Term, the Company shall bear the
          expense of an annual medical examination of the Executive at the
          Coopers Clinic or another facility selected by the Executive and
          reasonably satisfactory to the Company.

     (i)  Annual Review. Approximately every 12 months during the Term, the
          Executive and the Board or appropriate committee of the Board shall
          meet to discuss the Executive's performance and terms of the
          Executive's employment by the Company.

3.   TERMINATION.

     The Term and the Executive's employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this Agreement
only under the following circumstances:

     (a)  Circumstances.

          (i)  Death. The Term and the Executive's employment hereunder shall
               terminate upon his death.

          (ii) Disability. If the Executive has incurred a Disability, the
               Company may terminate the Term and the Executive's employment
               hereunder.

          (iii) Termination for Cause. The Company may terminate the Term and
               the Executive's employment hereunder for Cause.

          (iv) Termination without Cause. The Company may terminate the Term and
               the Executive's employment hereunder without Cause.


                                        3



          (v)  Resignation by the Executive. The Executive may resign his
               employment and terminate the Term for any reason.

          (vi) Non-extension of Term by the Company. The Company may give notice
               of non-extension to the Executive pursuant to Section 1(b).

          (vii) Non-extension of Term by the Executive. The Executive may give
               notice of non-extension to the Company pursuant to Section 1(b).

     (b)  Notice of Termination. Any termination of the Executive's employment
          by the Company or by the Executive under this Section 3 (other than
          termination pursuant to paragraph (a)(i)) shall be communicated by a
          written notice to the other party indicating the specific termination
          provision in this Agreement relied upon, and specifying a Date of
          Termination which, if submitted by the Executive, shall be at least
          two weeks following the date of such notice (a "Notice of
          Termination"). A Notice of Termination submitted by the Company may
          provide for a Date of Termination on the date the Executive receives
          the Notice of Termination, or any date thereafter elected by the
          Company in its sole discretion.

     (c)  Company obligations upon termination. Upon termination of the
          Executive's employment, the Executive (or the Executive's estate)
          shall be entitled to receive the sum of the Executive's Annual Base
          Salary through the Date of Termination not theretofore paid, any
          expenses owed to the Executive under Section 2(f), any accrued
          vacation pay owed to the Executive pursuant to Section 2(e), and any
          amount accrued and arising from the Executive's participation in, or
          benefits accrued under any employee benefit plans, programs or
          arrangements under Section 2(d), which amounts shall be payable in
          accordance with the terms and conditions of such employee benefit
          plans, programs or arrangements, and such other or additional benefits
          as may be, or become, due to him under the applicable terms of
          applicable plans, programs, agreements, corporate governance documents
          and other arrangements of the Company and its parent and subsidiaries
          (collectively, the "Company Arrangements").

4.   SEVERANCE PAYMENTS.

     (a)  Termination for Cause, Resignation by the Executive, Non-extension of
          Term by the Executive or the Company, death or Disability. If the
          Executive's employment is terminated pursuant to Section 3(a)(iii) for
          Cause, pursuant to Section 3(a)(v) for Resignation by the Executive,
          or pursuant to Section 3(a)(vii) due to non-extension of the Term by
          the Executive, the Executive shall not be entitled to any severance
          payment or benefits. If the Executive's employment is terminated
          pursuant to Section 3(a)(i) as a result of Executive's death or
          pursuant to Section 3(a)(ii) as a result of the Executive's
          Disability, the Company shall, subject to the Executive signing and
          not revoking, within sixty days following delivery to Executive, a
          separation and release agreement in the form attached hereto, (i) pay
          to the Executive an amount equal to the product of (x) the bonus that
          the Executive would have earned during the calendar year in which the
          Date


                                        4



          of Termination occurs, if any, and (y) a fraction, the numerator of
          which is the number of days that elapsed in such calendar year through
          the Date of Termination and the denominator of which is 365, payable
          when bonuses would have otherwise been payable had the Executive's
          employment not terminated and (ii) in the case of termination pursuant
          to Section 3(a)(ii) as a result of the Executive's Disability, pay to
          the Executive an amount equal to the excess, if any, of (x) the amount
          that would have been payable to the Executive pursuant to Section
          4(b)(i) if the Executive had been terminated by the Company without
          Cause pursuant to Section 3(a)(iv) over (y) the present value of the
          benefits to be received by the Executive (or his beneficiaries) under
          any disability plan sponsored by the Company or its affiliates (for
          purposes of this clause (ii) the amounts in (x) and (y) shall be
          determined by the Company on an after-tax basis to the extent that
          their receipt by the Executive (or his beneficiaries) would be subject
          to tax and on actuarial assumptions satisfactory to the Company). If
          the Executive's employment is terminated pursuant to Section 3(a)(vi)
          due to non-extension of the Term by the Company, the Company shall,
          subject to the Executive signing and not revoking, within sixty days
          following delivery to Executive, a separation and release agreement in
          the form attached hereto at Annex A, (i) pay to the Executive an
          amount equal to the product of (x) the bonus that the Executive would
          have earned during the calendar year in which the Date of Termination
          occurs, if any, and (y) a fraction, the numerator of which is the
          number of days that elapsed in such calendar year through the Date of
          Termination and the denominator of which is 365, payable when bonuses
          would have otherwise been payable had the Executive's employment not
          terminated and (ii) pay to the Executive, in a lump sum, an amount
          equal to the Annual Base Salary that the Executive would have been
          entitled to receive if the Executive had continued his employment
          hereunder for a period of 12 months following the Date of Termination.

     (b)  Termination without Cause. If the Executive's employment shall be
          terminated by the Company without Cause pursuant to Section 3(a)(iv)
          the Company shall, subject to the Executive signing and not revoking,
          within sixty days following delivery to Executive, a separation and
          release agreement in the form attached hereto:

          (i)  pay to the Executive, in a lump sum, an amount equal to the
               Annual Base Salary that the Executive would have been entitled to
               receive if the Executive had continued his employment hereunder
               for a period of 24 months following the Date of Termination;

          (ii) pay to the Executive an amount equal to the product of (x) the
               bonus that the Executive would have earned during the calendar
               year in which the Date of Termination occurs, if any, and (y) a
               fraction, the numerator of which is the number of days that
               elapsed in such calendar year through the Date of Termination and
               the denominator of which is 365, payable when bonuses would have
               otherwise been payable had the Executive's employment not
               terminated; and


                                        5



          (iii) cover the premium costs for medical benefits under COBRA for the
               Executive and, where applicable, his spouse and dependents, life
               insurance and disability insurance (all as in effect immediately
               prior to the Date of Termination) for a period of 12 months
               following the Date of Termination.

          If the Executive's employment shall be terminated by the Company
          without cause pursuant to Section 3(a)(iv), the Non-Competition
          Agreement dated December 27, 2005 between Parent and the Executive
          shall terminate on the earlier of the date it would have terminated
          without regard to this paragraph and a number of months after the Date
          of Termination equal to the number of months of Base Salary taken into
          account pursuant to Section 4(b)(i).

     (c)  Survival. The expiration or termination of the Term shall not impair
          the rights or obligations of any party hereto, which shall have
          accrued prior to such expiration or termination.

     (d)  409A. Notwithstanding anything to the contrary in this Section 4, no
          payments in this Section 4 will be paid during the six-month period
          following the Executive's termination of employment unless the Company
          determines, in its good faith judgment, that paying such amounts at
          the time or times indicated in this Section would not cause the
          Executive to incur an additional tax under Section 409A of the
          Internal Revenue Code of 1986, as amended (the "Code") (in which case
          such amounts shall be paid at the time or times indicated in this
          Section). If the payment of any amounts are delayed as a result of the
          previous sentence, on the first day following the end of the six-month
          period, the Company will pay the Executive a lump-sum amount equal to
          the cumulative amounts that would have otherwise been previously paid
          to the Executive under this Section 4. Thereafter, payments will
          resume in accordance with this Section.

5.   COMPETITION.

     (a)  The Executive shall not, at any time during the Term or during the
          two-year period following the Date of Termination, directly or
          indirectly engage in, have any equity interest in, or manage or
          operate any person, firm, corporation, partnership or business
          (whether as director, officer, employee, agent, representative,
          partner, security holder, consultant or otherwise) that engages in any
          business (x) which competes with any business of the Company anywhere
          in the States of California, Kansas, Missouri, Nevada or Texas, (y)
          which competes with any business of the Company in any State in which
          the Company operated a facility at any time (whether before or after
          the date of this Agreement) that the Executive was employed by the
          Company or (z) which derives $500,000,000 or more in annual
          consolidated revenues from the operation of skilled nursing facilities
          in the United States; provided, however, that the Executive shall be
          permitted to acquire a passive stock interest in such a business
          provided the stock acquired is publicly traded and is not more than
          five percent (5%) of the outstanding interest in such business.


                                        6



     (b)  The Executive shall not at any time during the Term or during the
          two-year period following the date of Termination, directly or
          indirectly, recruit or otherwise solicit or induce or encourage any
          employee, contractor, customer or supplier of the Company (i) to
          terminate its employment or arrangement with the Company, (ii) to
          otherwise change its relationship with the Company or (iii) to
          establish any relationship with the Executive or any other person,
          firm, corporation or other entity for any business purpose competitive
          with the business of the Company.

     (c)  In the event the terms of this Section 5 shall be determined by any
          court of competent jurisdiction to be unenforceable by reason of its
          extending for too great a period of time or over too great a
          geographical area or by reason of its being too extensive in any other
          respect, it will be interpreted to extend only over the maximum period
          of time for which it may be enforceable, over the maximum geographical
          area as to which it may be enforceable, or to the maximum extent in
          all other respects as to which it may be enforceable, all as
          determined by such court in such action.

     (d)  As used in this Section 5, the term "Company" shall include Parent,
          the Company and their respective direct or indirect subsidiaries.

     (e)  The Company acknowledges that, as of the Effective Date, the Executive
          owns (but does not operate) the long-term care facilities identified
          on Schedule 1 hereto. The Company agrees that such ownership interests
          shall not constitute a breach of Section 1(c) or this Section 5 by the
          Executive; provided that (1) the Executive does not acquire any
          additional ownership interests in long-term care facilities, (2) the
          Executive is not actively involved in the operation of any of such
          long-term care facilities, and (3) such ownership interests do not
          otherwise materially interfere with the Executive's duties to the
          Company hereunder.

6.   NONDISCLOSURE OF PROPRIETARY INFORMATION.

     (a)  Except in connection with the faithful performance of the Executive's
          duties hereunder or pursuant to Section 6(c), the Executive shall, in
          perpetuity, maintain in confidence and shall not directly, indirectly
          or otherwise, use, disseminate, disclose or publish, or use for his
          benefit or the benefit of any person, firm, corporation or other
          entity any confidential or proprietary information or trade secrets of
          or relating to the Company (including, without limitation,
          intellectual property in the form of patents, trademarks and
          copyrights and applications therefor, ideas, inventions, works,
          discoveries, improvements, information, documents, formulae,
          practices, processes, methods, developments, source code,
          modifications, technology, techniques, data, programs, other know-how
          or materials, owned, developed or possessed by the Company, whether in
          tangible or intangible form, information with respect to the Company's
          operations, processes, products, inventions, business practices,
          finances, principals, vendors, suppliers, customers, potential
          customers, marketing methods, costs, prices, contractual
          relationships, regulatory status, prospects and compensation paid to
          employees or other terms of employment), or deliver to any person,
          firm, corporation or other


                                        7



          entity any document, record, notebook, computer program or similar
          repository of or containing any such confidential or proprietary
          information or trade secrets. The parties hereby stipulate and agree
          that as between them the foregoing matters are important, material and
          confidential proprietary information and trade secrets and affect the
          successful conduct of the businesses of the Company (and any successor
          or assignee of the Company). Confidential Information shall not
          include any information which has entered the public domain through no
          fault of the Executive.

     (b)  Upon termination of the Executive's employment with the Company for
          any reason, the Executive will promptly deliver to the Company all
          correspondence, drawings, manuals, letters, notes, notebooks, reports,
          programs, plans, proposals, financial documents, or any other
          documents concerning the Company's customers, business plans,
          marketing strategies, products or processes.

     (c)  The Executive may respond to a lawful and valid subpoena or other
          legal process but shall give the Company the earliest possible notice
          thereof, shall, as much in advance of the return date as possible,
          make available to the Company and its counsel the documents and other
          information sought and shall assist such counsel at Company's expense
          in resisting or otherwise responding to such process.

     (d)  As used in this Section 6 and Section 7, the term "Company" shall
          include the Company and its direct or indirect parents, if any, and
          subsidiaries.

     (e)  Nothing in this Agreement shall prohibit the Executive from (i)
          disclosing information and documents when required by law, subpoena or
          court order (subject to the requirements of Section 6(c) above), (ii)
          disclosing information and documents to his attorney or tax adviser on
          a confidential basis for the purpose of securing legal or tax advice,
          (iii) disclosing the post-employment restrictions in this Agreement in
          confidence to any potential new employer, or (iv) retaining, at any
          time, his personal correspondence, his personal rolodex and documents
          related to his own personal benefits, entitlements and obligations.

7.   INVENTIONS.

     All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that the Executive may discover, invent or
originate during the Term, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company ("Inventions"),
shall be the exclusive property of the Company. The Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Executive hereby
appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.


                                        8



8.   INJUNCTIVE RELIEF.

     It is recognized and acknowledged by the Executive that a breach of the
covenants contained in Sections 5, 6 and 7 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Sections 5, 6 and 7, in addition to any
other remedy which may be available at law or in equity, the Company will be
entitled to specific performance and temporary, preliminary and permanent
injunctive relief.

9.   ASSIGNMENT AND SUCCESSORS.

     The Company may assign its rights and obligations under this Agreement to
any successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees,
and legatees, as applicable. None of the Executive's rights or obligations may
be assigned or transferred by the Executive, other than the Executive's rights
to payments hereunder, which may be transferred only by will or operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the
extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation
hereunder following his death by giving written notice thereof to the Company.

10.  CERTAIN DEFINITIONS.

     (a)  Cause. The Company shall have "Cause" to terminate the Term and the
          Executive's employment hereunder upon:

          (i)  the Executive's failure to perform substantially his duties as an
               employee of the Company (other than any such failure resulting
               from the Executive's incapacity due to physical or mental
               illness), which is not cured within 15 days after a written
               demand for performance is given to the Executive by the Board
               specifying in reasonable detail the manner in which the Executive
               has failed to perform substantially his duties as an employee of
               the Company;

          (ii) the Executive's failure to carry out, or comply with, in any
               material respect any lawful and reasonable directive of the Board
               consistent with the terms of this Agreement that, if capable of
               cure, is not cured by the Executive within 15 days after written
               notice given to the Executive describing such failure in
               reasonable detail;

          (iii) the Executive's conviction, plea of no contest, plea of nolo
               contendere, or imposition of unadjudicated probation for any
               felony or, to the extent involving fraud, dishonesty, theft,
               embezzlement or moral turpitude, any other crime;


                                        9



          (iv) the Executive's violation of a material regulatory requirement
               relating to the business of the Company and its subsidiaries
               that, in the good faith judgment of the Board, is injurious to
               the Company in any material respect;

          (v)  the Executive's unlawful use (including being under the
               influence) or possession of illegal drugs on the Company's
               premises or while performing the Executive's duties and
               responsibilities under this Agreement;

          (vi) the Executive's breach of this Agreement in any material respect
               that, if capable of cure, is not cured by the Executive within 15
               days after written notice given to the Executive describing such
               breach in reasonable detail; or

          (vii) the Executive's commission of an act of fraud, embezzlement,
               misappropriation, willful misconduct, gross negligence or breach
               of fiduciary duty with respect to the Company or any of its
               affiliates;

     (b)  Date of Termination. "Date of Termination" shall mean (i) if the
          Executive's employment is terminated by his death, the date of his
          death; (ii) if the Executive's employment is terminated pursuant to
          Section 3(a)(ii) - (v) either the date indicated in the Notice of
          Termination or the date specified by the Company pursuant to Section
          3(b), whichever is earlier; (iii) if the Executive's employment is
          terminated pursuant to Section 3(a)(vi) or Section 3(a)(vii), the
          expiration of the then-applicable Term.

     (c)  Disability. "Disability" shall mean, at any time the Company or any of
          its affiliates sponsors a long-term disability plan for the Company's
          employees in which the Executive participates, "disability" as defined
          in such long-term disability plan for the purpose of determining a
          participant's eligibility for benefits, provided, however, if the
          long-term disability plan contains multiple definitions of disability,
          "Disability" shall refer that definition of disability which, if the
          Executive qualified for such disability benefits, would provide
          coverage for the longest period of time. The determination of whether
          the Executive has a Disability shall be made by the person or persons
          required to make disability determinations under the long-term
          disability plan. At any time the Company does not sponsor a long-term
          disability plan for its employees in which the Executive participates,
          Disability shall mean the Executive's inability to perform, with or
          without reasonable accommodation, the essential functions of his
          position hereunder for a total of six months during any 12-month
          period as a result of incapacity due to mental or physical illness as
          determined by a physician selected by the Board and acceptable to the
          Executive or the Executive's legal representative, such agreement as
          to acceptability not to be unreasonably withheld or delayed. Any
          refusal by the Executive to submit to a medical examination for the
          purpose of determining Disability shall be deemed to constitute
          conclusive evidence of the Executive's Disability.


                                       10



11.  GOVERNING LAW.

     This Agreement shall be governed, construed, interpreted and enforced in
accordance with its express terms, and otherwise in accordance with the
substantive laws of the State of California, without reference to the principles
of conflicts of law, and where applicable, the federal laws of the United
States.

12.  VALIDITY.

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13.  NOTICES.

     Any notice, request, claim, demand, document and other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile or
certified or registered mail, postage prepaid, or any nationally recognized
overnight courier service with signature certification of receipt, as follows:

     (a)  If to the Company:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway
          Suite 200
          Foothill Ranch, California 92610
          Attn: General Counsel

          with copies to:

          Onex Partners LP
          712 Fifth Avenue
          New York, New York 10019
          Facsimile: (212) 582-0909
          Attention: Robert M. LeBlanc

          and:

          Kaye Scholer LLP
          425 Park Avenue
          New York, New York 10022
          Facsimile: (212) 836-8211
          Attention: Joel I. Greenberg


                                       11



     (b)  If to the Executive:

          Boyd W. Hendrickson

          [__________________________]
          [__________________________]
          Facsimile: [_____________]

     or at any other address as any party shall have specified by notice in
writing to the other party.

14.  COUNTERPARTS.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement. Signatures delivered by facsimile shall be deemed effective
for all purposes.

15.  ENTIRE AGREEMENT.

     The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive by
the Company and supersede all prior understandings and agreements, whether
written or oral. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

16.  AMENDMENTS; WAIVERS.

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by the Executive and a duly authorized officer of
Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties with any specifically identified provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity. Except as otherwise set forth in this Agreement, the respective rights
and obligations of the parties under this Agreement shall survive any
termination of Executive's employment.

17.  NO INCONSISTENT ACTIONS.

     The parties hereto shall not voluntarily undertake or fail to undertake any
action or course of action inconsistent with the provisions or essential intent
of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.


                                       12



18.  CONSTRUCTION.

     This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for convenience and are
not intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural; (b) "and" and "or" are each used
both conjunctively and disjunctively; (c) "any," "all," "each," or "every" means
"any and all," and "each and every"; (d) "includes" and "including" are each
"without limitation"; (e) "herein," "hereof," "hereunder" and other similar
compounds of the word "here" refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (f) all pronouns
and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the entities or persons referred
to may require.

19.  ARBITRATION.

     Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of the Executive's employment by the Company, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in Los Angeles County, California, before a sole neutral arbitrator
(the "Arbitrator"), mutually selected and agreeable to both parties and selected
from Judicial Arbitration and Mediation Services, Inc., Los Angeles County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the Arbitrator, such Arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure Sections 1280 et seq. as the exclusive forum
for the resolution of such dispute; provided, however, that provisional
injunctive relief (including, but not limited to, temporary restraining orders
and preliminary injunctions) may, but need not, be sought by either party to
this Amended Agreement in any court of competent jurisdiction while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator; no bond or other security shall be required in connection therewith.

     Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of
the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator's award or
decision is based. Any award or relief granted by the Arbitrator hereunder shall
be final and binding on the parties hereto and may be enforced by any court of
competent jurisdiction.

     The parties acknowledge and agree that they are hereby waiving any rights
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Amended Agreement or the services
rendered hereunder. The parties agree that the Company


                                       13



Shall be responsible for payment of the forum costs of any arbitration
hereunder, including the Arbitrator's fee. The Executive and the Company further
agree that in any proceeding to enforce the terms of this Amended Agreement, the
prevailing party shall be entitled to its or her reasonable attorneys' fees and
costs (other than forum costs associated with the arbitration) incurred by it or
him in connection with resolution of the dispute up to a maximum of Fifty
Thousand Dollars ($50,000.00) in addition to any other relief granted.

20.  ENFORCEMENT.

     If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21.  WITHHOLDING.

     The Company shall be entitled to withhold from any amounts payable under
this Agreement any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

22.  INDEMNIFICATION.

     The Company agrees that (a) if the Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding whether civil, criminal, administrative, investigative, appellate or
other (a "Proceeding") by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or (b) if any claim, demand, request, investigation, controversy, threat,
discovery request or request for testimony or information (a "Claim") is made,
or threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted by
the laws of the state of incorporation of the Company, against any and all
costs, expenses, liabilities and losses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company and shall inure to the
benefit of the Executive's heirs, executors and administrators. The Company may
assume the defense of any Proceeding or Claim with counsel selected by the
Company and reasonably satisfactory to the Executive and, if it does so, the
Executive shall not be entitled to be reimbursed for any separate counsel he may
retain in connection with such Proceeding or Claim.

     Neither the failure of the Company (including its Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification


                                       14



that the Executive has satisfied any applicable standard of conduct, nor a
determination by the Company (including its Board, independent legal counsel or
stockholders) that the Executive has not met any applicable standard of conduct,
shall create a presumption that the Executive has not met an applicable standard
of conduct.

     During the period of Employment and for a period of time thereafter
determined as provided below, the Company shall keep in place a directors and
officers' liability insurance policy (or policies) providing coverage, or such
coverage may be provided under a policy that provides coverage to Onex
Corporation or Onex Partners LP and their affiliates, to the Executive if and to
the extent that the Company provides such coverage to its directors and such
coverage (or other directors and officers liability insurance coverage) shall
continue after the termination of the Period of Employment if and for the period
of time that such coverage is extended to the Company's former director, other
than former directors who are employees of Onex Corporation, Onex Partners LP or
their affiliates.

23.  COOPERATION IN LITIGATION.

     The Executive promises and agrees that, following the date his employment
by the Company terminates, he will reasonably cooperate with the Company in any
litigation in which the Company is a party or otherwise involved which arises
out of events occurring prior to the termination of his employment, including
but not limited to, serving as a consultant (at a reasonable hourly rate) or
witness and producing documents and information relevant to the case or helpful
to the Company.

24.  EMPLOYEE ACKNOWLEDGEMENT.

     The Executive acknowledges that he has read and understands this Agreement,
is fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.


                                       15



     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Roland G. Rapp
                                        Title: General Counsel, Secretary and
                                               Chief Administrative Officer


                                        EXECUTIVE


                                        By:
                                            ------------------------------------
                                        Name: Boyd W. Hendrickson

                    [SIGNATURE PAGE -- EMPLOYMENT AGREEMENT]



                                   SCHEDULE 1

1.   Long term care facility located at the site commonly known as 7716
     Manchester, Playa Del Rey, California.

2.   Long term care facility located at the site commonly known as 1320
     Franklin, Santa Monica, California.

3.   Long term care facility located at the site commonly known as Garfield at
     Beach, Huntington Beach, California.

                                                                     HENDRICKSON



                                     ANNEX A

EX-10.5

                                                                    Exhibit 10.5

                              EMPLOYMENT AGREEMENT

     This Employment Agreement dated as of December 27, 2005 (the "Agreement"),
is made by and between Skilled Healthcare Group, Inc., a Delaware corporation
(together with any successor thereto, the "Company") and Jose C. Lynch (the
"Executive").

                                    RECITALS

A.   It is the desire of the Company to assure itself of the continued services
     of the Executive by entering into this Agreement.

B.   The Executive and the Company mutually desire that Executive provide
     services to the Company on the terms herein provided.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

1.   EMPLOYMENT.

     (a)  General. The Company shall employ the Executive and the Executive
          shall enter the employ of the Company, for the period set forth in
          Section 1(b), in the position set forth in Section 1(c), and upon the
          other terms and conditions herein provided.

     (b)  Employment Term. The initial term of employment under this Agreement
          (the "Initial Term") shall be for the period beginning on the Closing,
          as such term is defined in the Agreement and Plan of Merger (the
          "Merger Agreement"), dated as of October 22, 2005 among the Company,
          SHG Holding Solutions, Inc., a Delaware corporation ("Parent"), SHG
          Acquisition Corp., a Delaware corporation, Heritage Partners
          Management Company, LLP, Heritage Fund II, L.P., a Delaware limited
          partnership, and Heritage Investors II, L.L.C., a Delaware limited
          liability company (the date of such Closing is the "Effective Date")
          and ending on (and including) the second anniversary thereof, unless
          earlier terminated as provided in Section 3. Should the Closing not
          occur, this Agreement shall be null and void and shall not become
          effective. The employment term hereunder shall automatically be
          extended for successive one-year periods ("Extension Terms" and,
          collectively with the Initial Term, the "Term") unless either party
          gives written notice of non-extension to the other no later than sixty
          (60) days prior to the expiration of the then-applicable Term and
          subject to earlier termination as provided in Section 3.

     (c)  Position and Duties. The Executive shall serve as the President and
          Chief Operating Officer of the Company with such customary
          responsibilities, duties and authority as may from time to time be
          assigned to the Executive by the Chief Executive Officer of the
          Company, the Board of Directors of the Company (the "Board") or by the
          Board of Directors of Parent. The Executive shall devote



          substantially all his working time and efforts to the business and
          affairs of the Company (which may include service to Parent, the
          Company and their respective direct and indirect subsidiaries). The
          Executive agrees to observe and comply with the rules and policies of
          the Company as adopted by or under the authority of the Board from
          time to time. During the Term, it shall not be a violation of this
          Agreement for the Executive to serve on industry trade, civic or
          charitable boards or committees and manage his personal investments
          and affairs, as long as such activities do not materially interfere
          with the performance of the Executive's duties and responsibilities as
          an employee of the Company. During his employment and following
          termination of his employment with the Company, the Executive agrees
          not to disparage the Company, any of its products or practices, or any
          of its directors, officers, agents, representatives, stockholders or
          affiliates, either orally or in writing.

     (d)  Location. The Executive acknowledges that the Company's principal
          executive offices are currently located at Foothill Ranch, California.
          The Executive shall operate principally out of such executive offices,
          as they may be moved from time to time within 40 miles of their
          current location in Foothill Ranch, California. The Company expects,
          and the Executive agrees, that the Executive shall be required to
          travel from time to time in order to fulfill his duties to the
          Company.

2.   COMPENSATION AND RELATED MATTERS.

     (a)  Annual Base Salary. During the Term, the Executive shall receive a
          base salary at a rate of $460,000 per annum (the "Annual Base
          Salary"), which shall be paid in accordance with the customary payroll
          practices of the Company, subject to upward adjustment as may be
          determined by the Board in its discretion.

     (b)  Annual Bonus. During the Term, the Executive will be eligible to
          participate in an annual performance-based bonus plan established by
          the Board that provides an opportunity substantially the same as the
          bonus plan first adopted by the Board after the Effective Date.

     (c)  Restricted Stock Plan. During the Term, the Executive shall be
          entitled to participate in the equity plan (the "Restricted Stock
          Plan") of Parent pursuant to which, on the Effective Date, the
          Executive shall receive a number of shares of common stock of Parent
          equal to 2.8125% of the number of shares of common stock of Parent
          outstanding on the Effective Date, excluding shares issued under the
          Restricted Stock Plan. Restricted Stock shall vest as to 25% of the
          shares granted on the Effective Date and each of the first three
          anniversaries of the Effective Date, but only to the extent the
          Executive remains continuously employed by the Company through the
          applicable vesting date.

     (d)  Benefits. During the Term, the Executive shall be entitled to
          participate in group medical insurance, 401(k) and other standard
          benefits provided by the Company, as may be amended from time to time,
          which are applicable to the senior officers of the Company.


                                        2



     (e)  Vacation. During the Term, the Executive shall be entitled to four
          weeks paid vacation per calendar year and the maximum unused vacation
          time that the Executive may accrue is eight weeks. Any vacation shall
          be taken at the reasonable and mutual convenience of the Company and
          the Executive.

     (f)  Expenses. During the Term, the Company shall reimburse the Executive
          for all reasonable travel and other business expenses incurred by him
          in the performance of his duties to the Company in accordance with the
          Company's expense reimbursement policy.

     (g)  Key Person Insurance. At any time during the Term, the Company shall
          have the right to insure the life of the Executive for the Company's
          sole benefit. The Company shall have the right to determine the amount
          of insurance and the type of policy. The Executive shall cooperate
          with the Company in obtaining such insurance by submitting to physical
          examinations, by supplying all information reasonably required by any
          insurance carrier, and by executing all necessary documents reasonably
          required by any insurance carrier. The Executive shall incur no
          financial obligation by executing any required document, and shall
          have no interest in any such policy.

     (h)  Medical Examination. During the Term, the Company shall bear the
          expense of an annual medical examination of the Executive at the
          Coopers Clinic or another facility selected by the Executive and
          reasonably satisfactory to the Company.

     (i)  Annual Review. Approximately every 12 months during the Term, the
          Executive and the Company's Chief Executive Officer, Board or
          appropriate committee of the Board shall meet to discuss the
          Executive's performance and terms of the Executive's employment by the
          Company.

3.   TERMINATION.

     The Term and the Executive's employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this Agreement
only under the following circumstances:

     (a)  Circumstances.

          (i)  Death. The Term and the Executive's employment hereunder shall
               terminate upon his death.

          (ii) Disability. If the Executive has incurred a Disability, the
               Company may terminate the Term and the Executive's employment
               hereunder.

          (iii) Termination for Cause. The Company may terminate the Term and
               the Executive's employment hereunder for Cause.

          (iv) Termination without Cause. The Company may terminate the Term and
               the Executive's employment hereunder without Cause.


                                        3



          (v)  Resignation by the Executive. The Executive may resign his
               employment and terminate the Term for any reason.

          (vi) Non-extension of Term by the Company. The Company may give notice
               of non-extension to the Executive pursuant to Section 1(b).

          (vii) Non-extension of Term by the Executive. The Executive may give
               notice of non-extension to the Company pursuant to Section 1(b).

     (b)  Notice of Termination. Any termination of the Executive's employment
          by the Company or by the Executive under this Section 3 (other than
          termination pursuant to paragraph (a)(i)) shall be communicated by a
          written notice to the other party indicating the specific termination
          provision in this Agreement relied upon, and specifying a Date of
          Termination which, if submitted by the Executive, shall be at least
          two weeks following the date of such notice (a "Notice of
          Termination"). A Notice of Termination submitted by the Company may
          provide for a Date of Termination on the date the Executive receives
          the Notice of Termination, or any date thereafter elected by the
          Company in its sole discretion.

     (c)  Company obligations upon termination. Upon termination of the
          Executive's employment, the Executive (or the Executive's estate)
          shall be entitled to receive the sum of the Executive's Annual Base
          Salary through the Date of Termination not theretofore paid, any
          expenses owed to the Executive under Section 2(f), any accrued
          vacation pay owed to the Executive pursuant to Section 2(e), and any
          amount accrued and arising from the Executive's participation in, or
          benefits accrued under any employee benefit plans, programs or
          arrangements under Section 2(d), which amounts shall be payable in
          accordance with the terms and conditions of such employee benefit
          plans, programs or arrangements, and such other or additional benefits
          as may be, or become, due to him under the applicable terms of
          applicable plans, programs, agreements, corporate governance documents
          and other arrangements of the Company and its parent and subsidiaries
          (collectively, the "Company Arrangements").

4.   SEVERANCE PAYMENTS.

     (a)  Termination for Cause, Resignation by the Executive, Non-extension of
          Term by the Executive or the Company, death or Disability. If the
          Executive's employment is terminated pursuant to Section 3(a)(iii) for
          Cause, pursuant to Section 3(a)(v) for Resignation by the Executive,
          or pursuant to Section 3(a)(vii) due to non-extension of the Term by
          the Executive, the Executive shall not be entitled to any severance
          payment or benefits. If the Executive's employment is terminated
          pursuant to Section 3(a)(i) as a result of Executive's death or
          pursuant to Section 3(a)(ii) as a result of the Executive's
          Disability, the Company shall, subject to the Executive signing and
          not revoking, within sixty days following delivery to Executive, a
          separation and release agreement in the form attached hereto, (i) pay
          to the Executive an amount equal to the product of (x) the bonus that
          the Executive would have earned during the calendar year in which the
          Date


                                        4



          of Termination occurs, if any, and (y) a fraction, the numerator of
          which is the number of days that elapsed in such calendar year through
          the Date of Termination and the denominator of which is 365, payable
          when bonuses would have otherwise been payable had the Executive's
          employment not terminated and (ii) in the case of termination pursuant
          to Section 3(a)(ii) as a result of the Executive's Disability, pay to
          the Executive an amount equal to the excess, if any, of (x) the amount
          that would have been payable to the Executive pursuant to Section
          4(b)(i) if the Executive had been terminated by the Company without
          Cause pursuant to Section 3(a)(iv) over (y) the present value of the
          benefits to be received by the Executive (or his beneficiaries) under
          any disability plan sponsored by the Company or its affiliates (for
          purposes of this clause (ii) the amounts in (x) and (y) shall be
          determined by the Company on an after-tax basis to the extent that
          their receipt by the Executive (or his beneficiaries) would be subject
          to tax and on actuarial assumptions satisfactory to the Company). If
          the Executive's employment is terminated pursuant to Section 3(a)(vi)
          due to non-extension of the Term by the Company, the Company shall,
          subject to the Executive signing and not revoking, within sixty days
          following delivery to Executive, a separation and release agreement in
          the form attached hereto at Annex A, (i) pay to the Executive an
          amount equal to the product of (x) the bonus that the Executive would
          have earned during the calendar year in which the Date of Termination
          occurs, if any, and (y) a fraction, the numerator of which is the
          number of days that elapsed in such calendar year through the Date of
          Termination and the denominator of which is 365, payable when bonuses
          would have otherwise been payable had the Executive's employment not
          terminated and (ii) pay to the Executive, in a lump sum, an amount
          equal to the Annual Base Salary that the Executive would have been
          entitled to receive if the Executive had continued his employment
          hereunder for a period of 12 months following the Date of Termination.

     (b)  Termination without Cause. If the Executive's employment shall be
          terminated by the Company without Cause pursuant to Section 3(a)(iv)
          the Company shall, subject to the Executive signing and not revoking,
          within sixty days following delivery to Executive, a separation and
          release agreement in the form attached hereto:

          (i)  pay to the Executive, in a lump sum, an amount equal to the
               Annual Base Salary that the Executive would have been entitled to
               receive if the Executive had continued his employment hereunder
               for a period of 24 months following the Date of Termination;

          (ii) pay to the Executive an amount equal to the product of (x) the
               bonus that the Executive would have earned during the calendar
               year in which the Date of Termination occurs, if any, and (y) a
               fraction, the numerator of which is the number of days that
               elapsed in such calendar year through the Date of Termination and
               the denominator of which is 365, payable when bonuses would have
               otherwise been payable had the Executive's employment not
               terminated; and


                                        5



          (iii) cover the premium costs for medical benefits under COBRA for the
               Executive and, where applicable, his spouse and dependents, life
               insurance and disability insurance (all as in effect immediately
               prior to the Date of Termination) for a period of 12 months
               following the Date of Termination.

          If the Executive's employment shall be terminated by the Company
          without cause pursuant to Section 3(a)(iv), the Non-Competition
          Agreement dated December 27, 2005 between Parent and the Executive
          shall terminate on the earlier of the date it would have terminated
          without regard to this paragraph and a number of months after the Date
          of Termination equal to the number of months of Base Salary taken into
          account pursuant to Section 4(b)(i).

     (c)  Survival. The expiration or termination of the Term shall not impair
          the rights or obligations of any party hereto, which shall have
          accrued prior to such expiration or termination.

     (d)  409A. Notwithstanding anything to the contrary in this Section 4, no
          payments in this Section 4 will be paid during the six-month period
          following the Executive's termination of employment unless the Company
          determines, in its good faith judgment, that paying such amounts at
          the time or times indicated in this Section would not cause the
          Executive to incur an additional tax under Section 409A of the
          Internal Revenue Code of 1986, as amended (the "Code") (in which case
          such amounts shall be paid at the time or times indicated in this
          Section). If the payment of any amounts are delayed as a result of the
          previous sentence, on the first day following the end of the six-month
          period, the Company will pay the Executive a lump-sum amount equal to
          the cumulative amounts that would have otherwise been previously paid
          to the Executive under this Section 4. Thereafter, payments will
          resume in accordance with this Section.

5.   COMPETITION.

     (a)  The Executive shall not, at any time during the Term or during the
          two-year period following the Date of Termination, directly or
          indirectly engage in, have any equity interest in, or manage or
          operate any person, firm, corporation, partnership or business
          (whether as director, officer, employee, agent, representative,
          partner, security holder, consultant or otherwise) that engages in any
          business (x) which competes with any business of the Company anywhere
          in the States of California, Kansas, Missouri, Nevada or Texas, (y)
          which competes with any business of the Company in any State in which
          the Company operated a facility at any time (whether before or after
          the date of this Agreement) that the Executive was employed by the
          Company or (z) which derives $500,000,000 or more in annual
          consolidated revenues from the operation of skilled nursing facilities
          in the United States; provided, however, that the Executive shall be
          permitted to acquire a passive stock interest in such a business
          provided the stock acquired is publicly traded and is not more than
          five percent (5%) of the outstanding interest in such business.


                                        6



     (b)  The Executive shall not at any time during the Term or during the
          two-year period following the date of Termination, directly or
          indirectly, recruit or otherwise solicit or induce or encourage any
          employee, contractor, customer or supplier of the Company (i) to
          terminate its employment or arrangement with the Company, (ii) to
          otherwise change its relationship with the Company or (iii) to
          establish any relationship with the Executive or any other person,
          firm, corporation or other entity for any business purpose competitive
          with the business of the Company.

     (c)  In the event the terms of this Section 5 shall be determined by any
          court of competent jurisdiction to be unenforceable by reason of its
          extending for too great a period of time or over too great a
          geographical area or by reason of its being too extensive in any other
          respect, it will be interpreted to extend only over the maximum period
          of time for which it may be enforceable, over the maximum geographical
          area as to which it may be enforceable, or to the maximum extent in
          all other respects as to which it may be enforceable, all as
          determined by such court in such action.

     (d)  As used in this Section 5, the term "Company" shall include Parent,
          the Company and their respective direct or indirect subsidiaries.

6.   NONDISCLOSURE OF PROPRIETARY INFORMATION.

     (a)  Except in connection with the faithful performance of the Executive's
          duties hereunder or pursuant to Section 6(c), the Executive shall, in
          perpetuity, maintain in confidence and shall not directly, indirectly
          or otherwise, use, disseminate, disclose or publish, or use for his
          benefit or the benefit of any person, firm, corporation or other
          entity any confidential or proprietary information or trade secrets of
          or relating to the Company (including, without limitation,
          intellectual property in the form of patents, trademarks and
          copyrights and applications therefor, ideas, inventions, works,
          discoveries, improvements, information, documents, formulae,
          practices, processes, methods, developments, source code,
          modifications, technology, techniques, data, programs, other know-how
          or materials, owned, developed or possessed by the Company, whether in
          tangible or intangible form, information with respect to the Company's
          operations, processes, products, inventions, business practices,
          finances, principals, vendors, suppliers, customers, potential
          customers, marketing methods, costs, prices, contractual
          relationships, regulatory status, prospects and compensation paid to
          employees or other terms of employment), or deliver to any person,
          firm, corporation or other entity any document, record, notebook,
          computer program or similar repository of or containing any such
          confidential or proprietary information or trade secrets. The parties
          hereby stipulate and agree that as between them the foregoing matters
          are important, material and confidential proprietary information and
          trade secrets and affect the successful conduct of the businesses of
          the Company (and any successor or assignee of the Company).
          Confidential Information shall not include any information which has
          entered the public domain through no fault of the Executive.


                                        7



     (b)  Upon termination of the Executive's employment with the Company for
          any reason, the Executive will promptly deliver to the Company all
          correspondence, drawings, manuals, letters, notes, notebooks, reports,
          programs, plans, proposals, financial documents, or any other
          documents concerning the Company's customers, business plans,
          marketing strategies, products or processes.

     (c)  The Executive may respond to a lawful and valid subpoena or other
          legal process but shall give the Company the earliest possible notice
          thereof, shall, as much in advance of the return date as possible,
          make available to the Company and its counsel the documents and other
          information sought and shall assist such counsel at Company's expense
          in resisting or otherwise responding to such process.

     (d)  As used in this Section 6 and Section 7, the term "Company" shall
          include the Company and its direct or indirect parents, if any, and
          subsidiaries.

     (e)  Nothing in this Agreement shall prohibit the Executive from (i)
          disclosing information and documents when required by law, subpoena or
          court order (subject to the requirements of Section 6(c) above), (ii)
          disclosing information and documents to his attorney or tax adviser on
          a confidential basis for the purpose of securing legal or tax advice,
          (iii) disclosing the post-employment restrictions in this Agreement in
          confidence to any potential new employer, or (iv) retaining, at any
          time, his personal correspondence, his personal rolodex and documents
          related to his own personal benefits, entitlements and obligations.

7.   INVENTIONS.

     All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that the Executive may discover, invent or
originate during the Term, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company ("Inventions"),
shall be the exclusive property of the Company. The Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Executive hereby
appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.

8.   INJUNCTIVE RELIEF.

     It is recognized and acknowledged by the Executive that a breach of the
covenants contained in Sections 5, 6 and 7 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Sections 5, 6 and 7, in addition to any
other remedy


                                        8



which may be available at law or in equity, the Company will be entitled to
specific performance and temporary, preliminary and permanent injunctive relief.

9.   ASSIGNMENT AND SUCCESSORS.

     The Company may assign its rights and obligations under this Agreement to
any successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees,
and legatees, as applicable. None of the Executive's rights or obligations may
be assigned or transferred by the Executive, other than the Executive's rights
to payments hereunder, which may be transferred only by will or operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the
extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation
hereunder following his death by giving written notice thereof to the Company.

10.  CERTAIN DEFINITIONS.

     (a)  Cause. The Company shall have "Cause" to terminate the Term and the
          Executive's employment hereunder upon:

          (i)  the Executive's failure to perform substantially his duties as an
               employee of the Company (other than any such failure resulting
               from the Executive's incapacity due to physical or mental
               illness), which is not cured within 15 days after a written
               demand for performance is given to the Executive by the Board
               specifying in reasonable detail the manner in which the Executive
               has failed to perform substantially his duties as an employee of
               the Company;

          (ii) the Executive's failure to carry out, or comply with, in any
               material respect any lawful and reasonable directive of the Board
               consistent with the terms of this Agreement that, if capable of
               cure, is not cured by the Executive within 15 days after written
               notice given to the Executive describing such failure in
               reasonable detail;

          (iii) the Executive's conviction, plea of no contest, plea of nolo
               contendere, or imposition of unadjudicated probation for any
               felony or, to the extent involving fraud, dishonesty, theft,
               embezzlement or moral turpitude, any other crime;

          (iv) the Executive's violation of a material regulatory requirement
               relating to the business of the Company and its subsidiaries
               that, in the good faith judgment of the Board, is injurious to
               the Company in any material respect;


                                        9



          (v)  the Executive's unlawful use (including being under the
               influence) or possession of illegal drugs on the Company's
               premises or while performing the Executive's duties and
               responsibilities under this Agreement;

          (vi) the Executive's breach of this Agreement in any material respect
               that, if capable of cure, is not cured by the Executive within 15
               days after written notice given to the Executive describing such
               breach in reasonable detail; or

          (vii) the Executive's commission of an act of fraud, embezzlement,
               misappropriation, willful misconduct, gross negligence or breach
               of fiduciary duty with respect to the Company or any of its
               affiliates;

     (b)  Date of Termination. "Date of Termination" shall mean (i) if the
          Executive's employment is terminated by his death, the date of his
          death; (ii) if the Executive's employment is terminated pursuant to
          Section 3(a)(ii) - (v) either the date indicated in the Notice of
          Termination or the date specified by the Company pursuant to Section
          3(b), whichever is earlier; (iii) if the Executive's employment is
          terminated pursuant to Section 3(a)(vi) or Section 3(a)(vii), the
          expiration of the then-applicable Term.

     (c)  Disability. "Disability" shall mean, at any time the Company or any of
          its affiliates sponsors a long-term disability plan for the Company's
          employees in which the Executive participates, "disability" as defined
          in such long-term disability plan for the purpose of determining a
          participant's eligibility for benefits, provided, however, if the
          long-term disability plan contains multiple definitions of disability,
          "Disability" shall refer that definition of disability which, if the
          Executive qualified for such disability benefits, would provide
          coverage for the longest period of time. The determination of whether
          the Executive has a Disability shall be made by the person or persons
          required to make disability determinations under the long-term
          disability plan. At any time the Company does not sponsor a long-term
          disability plan for its employees in which the Executive participates,
          Disability shall mean the Executive's inability to perform, with or
          without reasonable accommodation, the essential functions of his
          position hereunder for a total of six months during any 12-month
          period as a result of incapacity due to mental or physical illness as
          determined by a physician selected by the Board and acceptable to the
          Executive or the Executive's legal representative, such agreement as
          to acceptability not to be unreasonably withheld or delayed. Any
          refusal by the Executive to submit to a medical examination for the
          purpose of determining Disability shall be deemed to constitute
          conclusive evidence of the Executive's Disability.

11.  GOVERNING LAW.

     This Agreement shall be governed, construed, interpreted and enforced in
accordance with its express terms, and otherwise in accordance with the
substantive laws of the State of


                                       10



California, without reference to the principles of conflicts of law, and where
applicable, the federal laws of the United States.

12.  VALIDITY.

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13.  NOTICES.

     Any notice, request, claim, demand, document and other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile or
certified or registered mail, postage prepaid, or any nationally recognized
overnight courier service with signature certification of receipt, as follows:

     (a)  If to the Company:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway
          Suite 200
          Foothill Ranch, California 92610
          Attn: General Counsel

          with copies to:

          Onex Partners LP
          712 Fifth Avenue
          New York, New York 10019
          Facsimile: (212) 582-0909
          Attention: Robert M. LeBlanc

          and:

          Kaye Scholer LLP
          425 Park Avenue
          New York, New York 10022
          Facsimile: (212) 836-8211
          Attention: Joel I. Greenberg

     (b)  If to the Executive:

          Jose C. Lynch
          [__________________________]
          [__________________________]
          Facsimile: [_____________]


                                       11



     or at any other address as any party shall have specified by notice in
writing to the other party.

14.  COUNTERPARTS.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement. Signatures delivered by facsimile shall be deemed effective
for all purposes.

15.  ENTIRE AGREEMENT.

     The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive by
the Company and supersede all prior understandings and agreements, whether
written or oral. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

16.  AMENDMENTS; WAIVERS.

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by the Executive and a duly authorized officer of
Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties with any specifically identified provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity. Except as otherwise set forth in this Agreement, the respective rights
and obligations of the parties under this Agreement shall survive any
termination of Executive's employment.

17.  NO INCONSISTENT ACTIONS.

     The parties hereto shall not voluntarily undertake or fail to undertake any
action or course of action inconsistent with the provisions or essential intent
of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.

18.  CONSTRUCTION.

     This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for convenience and are
not intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural;


                                       12



(b) "and" and "or" are each used both conjunctively and disjunctively; (c)
"any," "all," "each," or "every" means "any and all," and "each and every"; (d)
"includes" and "including" are each "without limitation"; (e) "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the entities or persons referred to may require.

19.  ARBITRATION.

     Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of the Executive's employment by the Company, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in Los Angeles County, California, before a sole neutral arbitrator
(the "Arbitrator"), mutually selected and agreeable to both parties and selected
from Judicial Arbitration and Mediation Services, Inc., Los Angeles County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the Arbitrator, such Arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure Sections 1280 et seq. as the exclusive forum
for the resolution of such dispute; provided, however, that provisional
injunctive relief (including, but not limited to, temporary restraining orders
and preliminary injunctions) may, but need not, be sought by either party to
this Amended Agreement in any court of competent jurisdiction while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator; no bond or other security shall be required in connection therewith.

     Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of
the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator's award or
decision is based. Any award or relief granted by the Arbitrator hereunder shall
be final and binding on the parties hereto and may be enforced by any court of
competent jurisdiction.

     The parties acknowledge and agree that they are hereby waiving any rights
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Amended Agreement or the services
rendered hereunder. The parties agree that the Company Shall be responsible for
payment of the forum costs of any arbitration hereunder, including the
Arbitrator's fee. The Executive and the Company further agree that in any
proceeding to enforce the terms of this Amended Agreement, the prevailing party
shall be entitled to its or her reasonable attorneys' fees and costs (other than
forum costs associated with the arbitration) incurred by it or him in connection
with resolution of the dispute up to a maximum of Fifty Thousand Dollars
($50,000.00) in addition to any other relief granted.


                                       13



20.  ENFORCEMENT.

     If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21.  WITHHOLDING.

     The Company shall be entitled to withhold from any amounts payable under
this Agreement any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

22.  INDEMNIFICATION.

     The Company agrees that (a) if the Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding whether civil, criminal, administrative, investigative, appellate or
other (a "Proceeding") by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or (b) if any claim, demand, request, investigation, controversy, threat,
discovery request or request for testimony or information (a "Claim") is made,
or threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted by
the laws of the state of incorporation of the Company, against any and all
costs, expenses, liabilities and losses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company and shall inure to the
benefit of the Executive's heirs, executors and administrators. The Company may
assume the defense of any Proceeding or Claim with counsel selected by the
Company and reasonably satisfactory to the Executive and, if it does so, the
Executive shall not be entitled to be reimbursed for any separate counsel he may
retain in connection with such Proceeding or Claim.

     Neither the failure of the Company (including its Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification that the Executive has satisfied any applicable
standard of conduct, nor a determination by the Company (including its Board,
independent legal counsel or stockholders) that the Executive has not met any
applicable standard of conduct, shall create a presumption that the Executive
has not met an applicable standard of conduct.

     During the period of Employment and for a period of time thereafter
determined as provided below, the Company shall keep in place a directors and
officers' liability insurance


                                       14



policy (or policies) providing coverage, or such coverage may be provided under
a policy that provides coverage to Onex Corporation or Onex Partners LP and
their affiliates, to the Executive if and to the extent that the Company
provides such coverage to its directors and such coverage (or other directors
and officers liability insurance coverage) shall continue after the termination
of the Period of Employment if and for the period of time that such coverage is
extended to the Company's former director, other than former directors who are
employees of Onex Corporation, Onex Partners LP or their affiliates.

23.  COOPERATION IN LITIGATION.

     The Executive promises and agrees that, following the date his employment
by the Company terminates, he will reasonably cooperate with the Company in any
litigation in which the Company is a party or otherwise involved which arises
out of events occurring prior to the termination of his employment, including
but not limited to, serving as a consultant (at a reasonable hourly rate) or
witness and producing documents and information relevant to the case or helpful
to the Company.

24.  EMPLOYEE ACKNOWLEDGEMENT.

     The Executive acknowledges that he has read and understands this Agreement,
is fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.


                                       15



     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Boyd W. Hendrickson
                                        Title: Chief Executive Officer


                                        EXECUTIVE


                                        By:
                                            ------------------------------------
                                        Name: Jose C. Lynch

                    [SIGNATURE PAGE -- EMPLOYMENT AGREEMENT]



                                     ANNEX A

EX-10.6

                                                                    Exhibit 10.6

                              EMPLOYMENT AGREEMENT

     This Employment Agreement dated as of December 27, 2005 (the "Agreement"),
is made by and between Skilled Healthcare Group, Inc., a Delaware corporation
(together with any successor thereto, the "Company") and John E. King (the
"Executive").

                                    RECITALS

A.   It is the desire of the Company to assure itself of the continued services
     of the Executive by entering into this Agreement.

B.   The Executive and the Company mutually desire that Executive provide
     services to the Company on the terms herein provided.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

1.   EMPLOYMENT.

     (a)  General. The Company shall employ the Executive and the Executive
          shall enter the employ of the Company, for the period set forth in
          Section 1(b), in the position set forth in Section 1(c), and upon the
          other terms and conditions herein provided.

     (b)  Employment Term. The initial term of employment under this Agreement
          (the "Initial Term") shall be for the period beginning on the Closing,
          as such term is defined in the Agreement and Plan of Merger (the
          "Merger Agreement"), dated as of October 22, 2005 among the Company,
          SHG Holding Solutions, Inc., a Delaware corporation ("Parent"), SHG
          Acquisition Corp., a Delaware corporation, Heritage Partners
          Management Company, LLP, Heritage Fund II, L.P., a Delaware limited
          partnership, and Heritage Investors II, L.L.C., a Delaware limited
          liability company (the date of such Closing is the "Effective Date")
          and ending on (and including) the second anniversary thereof, unless
          earlier terminated as provided in Section 3. Should the Closing not
          occur, this Agreement shall be null and void and shall not become
          effective. The employment term hereunder shall automatically be
          extended for successive one-year periods ("Extension Terms" and,
          collectively with the Initial Term, the "Term") unless either party
          gives written notice of non-extension to the other no later than sixty
          (60) days prior to the expiration of the then-applicable Term and
          subject to earlier termination as provided in Section 3.

     (c)  Position and Duties. The Executive shall serve as the Chief Financial
          Officer of the Company with such customary responsibilities, duties
          and authority as may from time to time be assigned to the Executive by
          the Chief Executive Officer of the Company, the Board of Directors of
          the Company (the "Board") or by the Board of Directors of Parent. The
          Executive shall devote substantially all his



          working time and efforts to the business and affairs of the Company
          (which may include service to Parent, the Company and their respective
          direct and indirect subsidiaries). The Executive agrees to observe and
          comply with the rules and policies of the Company as adopted by or
          under the authority of the Board from time to time. During the Term,
          it shall not be a violation of this Agreement for the Executive to
          serve on industry trade, civic or charitable boards or committees and
          manage his personal investments and affairs, as long as such
          activities do not materially interfere with the performance of the
          Executive's duties and responsibilities as an employee of the Company.
          During his employment and following termination of his employment with
          the Company, the Executive agrees not to disparage the Company, any of
          its products or practices, or any of its directors, officers, agents,
          representatives, stockholders or affiliates, either orally or in
          writing.

     (d)  Location. The Executive acknowledges that the Company's principal
          executive offices are currently located at Foothill Ranch, California.
          The Executive shall operate principally out of such executive offices,
          as they may be moved from time to time within 40 miles of their
          current location in Foothill Ranch, California. The Company expects,
          and the Executive agrees, that the Executive shall be required to
          travel from time to time in order to fulfill his duties to the
          Company.

2.   COMPENSATION AND RELATED MATTERS.

     (a)  Annual Base Salary. During the Term, the Executive shall receive a
          base salary at a rate of $335,000 per annum (the "Annual Base
          Salary"), which shall be paid in accordance with the customary payroll
          practices of the Company, subject to upward adjustment as may be
          determined by the Board in its discretion.

     (b)  Annual Bonus. During the Term, the Executive will be eligible to
          participate in an annual performance-based bonus plan established by
          the Board that provides an opportunity substantially the same as the
          bonus plan first adopted by the Board after the Effective Date.

     (c)  Restricted Stock Plan. During the Term, the Executive shall be
          entitled to participate in the equity plan (the "Restricted Stock
          Plan") of Parent pursuant to which, on the Effective Date, the
          Executive shall receive a number of shares of common stock of Parent
          equal to 1.2500% of the number of shares of common stock of Parent
          outstanding on the Effective Date, excluding shares issued under the
          Restricted Stock Plan. Restricted Stock shall vest as to 25% of the
          shares granted on the Effective Date and each of the first three
          anniversaries of the Effective Date, but only to the extent the
          Executive remains continuously employed by the Company through the
          applicable vesting date.

     (d)  Benefits. During the Term, the Executive shall be entitled to
          participate in group medical insurance, 401(k) and other standard
          benefits provided by the Company, as may be amended from time to time,
          which are applicable to the senior officers of the Company.


                                       2



     (e)  Vacation. During the Term, the Executive shall be entitled to four
          weeks paid vacation per calendar year and the maximum unused vacation
          time that the Executive may accrue is eight weeks. Any vacation shall
          be taken at the reasonable and mutual convenience of the Company and
          the Executive.

     (f)  Expenses. During the Term, the Company shall reimburse the Executive
          for all reasonable travel and other business expenses incurred by him
          in the performance of his duties to the Company in accordance with the
          Company's expense reimbursement policy.

     (g)  Key Person Insurance. At any time during the Term, the Company shall
          have the right to insure the life of the Executive for the Company's
          sole benefit. The Company shall have the right to determine the amount
          of insurance and the type of policy. The Executive shall cooperate
          with the Company in obtaining such insurance by submitting to physical
          examinations, by supplying all information reasonably required by any
          insurance carrier, and by executing all necessary documents reasonably
          required by any insurance carrier. The Executive shall incur no
          financial obligation by executing any required document, and shall
          have no interest in any such policy.

     (h)  Medical Examination. During the Term, the Company shall bear the
          expense of an annual medical examination of the Executive at the
          Coopers Clinic or another facility selected by the Executive and
          reasonably satisfactory to the Company.

     (i)  Annual Review. Approximately every 12 months during the Term, the
          Executive and the Company's Chief Executive Officer, Board or
          appropriate committee of the Board shall meet to discuss the
          Executive's performance and terms of the Executive's employment by the
          Company.

3.   TERMINATION.

     The Term and the Executive's employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this Agreement
only under the following circumstances:

     (a)  Circumstances.

          (i)  Death. The Term and the Executive's employment hereunder shall
               terminate upon his death.

          (ii) Disability. If the Executive has incurred a Disability, the
               Company may terminate the Term and the Executive's employment
               hereunder.

          (iii) Termination for Cause. The Company may terminate the Term and
               the Executive's employment hereunder for Cause.

          (iv) Termination without Cause. The Company may terminate the Term and
               the Executive's employment hereunder without Cause.


                                       3



          (v)  Resignation by the Executive. The Executive may resign his
               employment and terminate the Term for any reason.

          (vi) Non-extension of Term by the Company. The Company may give notice
               of non-extension to the Executive pursuant to Section 1(b).

          (vii) Non-extension of Term by the Executive. The Executive may give
               notice of non-extension to the Company pursuant to Section 1(b).

     (b)  Notice of Termination. Any termination of the Executive's employment
          by the Company or by the Executive under this Section 3 (other than
          termination pursuant to paragraph (a)(i)) shall be communicated by a
          written notice to the other party indicating the specific termination
          provision in this Agreement relied upon, and specifying a Date of
          Termination which, if submitted by the Executive, shall be at least
          two weeks following the date of such notice (a "Notice of
          Termination"). A Notice of Termination submitted by the Company may
          provide for a Date of Termination on the date the Executive receives
          the Notice of Termination, or any date thereafter elected by the
          Company in its sole discretion.

     (c)  Company obligations upon termination. Upon termination of the
          Executive's employment, the Executive (or the Executive's estate)
          shall be entitled to receive the sum of the Executive's Annual Base
          Salary through the Date of Termination not theretofore paid, any
          expenses owed to the Executive under Section 2(f), any accrued
          vacation pay owed to the Executive pursuant to Section 2(e), and any
          amount accrued and arising from the Executive's participation in, or
          benefits accrued under any employee benefit plans, programs or
          arrangements under Section 2(d), which amounts shall be payable in
          accordance with the terms and conditions of such employee benefit
          plans, programs or arrangements, and such other or additional benefits
          as may be, or become, due to him under the applicable terms of
          applicable plans, programs, agreements, corporate governance documents
          and other arrangements of the Company and its parent and subsidiaries
          (collectively, the "Company Arrangements").

4.   SEVERANCE PAYMENTS.

     (a)  Termination for Cause, Resignation by the Executive, Non-extension of
          Term by the Executive or the Company, death or Disability. If the
          Executive's employment is terminated pursuant to Section 3(a)(iii) for
          Cause, pursuant to Section 3(a)(v) for Resignation by the Executive,
          or pursuant to Section 3(a)(vii) due to non-extension of the Term by
          the Executive, the Executive shall not be entitled to any severance
          payment or benefits. If the Executive's employment is terminated
          pursuant to Section 3(a)(i) as a result of Executive's death or
          pursuant to Section 3(a)(ii) as a result of the Executive's
          Disability, the Company shall, subject to the Executive signing and
          not revoking, within sixty days following delivery to Executive, a
          separation and release agreement in the form attached hereto, (i) pay
          to the Executive an amount equal to the product of (x) the bonus that
          the Executive would have earned during the calendar year in which the
          Date


                                       4



          of Termination occurs, if any, and (y) a fraction, the numerator of
          which is the number of days that elapsed in such calendar year through
          the Date of Termination and the denominator of which is 365, payable
          when bonuses would have otherwise been payable had the Executive's
          employment not terminated and (ii) in the case of termination pursuant
          to Section 3(a)(ii) as a result of the Executive's Disability, pay to
          the Executive an amount equal to the excess, if any, of (x) the amount
          that would have been payable to the Executive pursuant to Section
          4(b)(i) if the Executive had been terminated by the Company without
          Cause pursuant to Section 3(a)(iv) over (y) the present value of the
          benefits to be received by the Executive (or his beneficiaries) under
          any disability plan sponsored by the Company or its affiliates (for
          purposes of this clause (ii) the amounts in (x) and (y) shall be
          determined by the Company on an after-tax basis to the extent that
          their receipt by the Executive (or his beneficiaries) would be subject
          to tax and on actuarial assumptions satisfactory to the Company). If
          the Executive's employment is terminated pursuant to Section 3(a)(vi)
          due to non-extension of the Term by the Company, the Company shall,
          subject to the Executive signing and not revoking, within sixty days
          following delivery to Executive, a separation and release agreement in
          the form attached hereto at Annex A, (i) pay to the Executive an
          amount equal to the product of (x) the bonus that the Executive would
          have earned during the calendar year in which the Date of Termination
          occurs, if any, and (y) a fraction, the numerator of which is the
          number of days that elapsed in such calendar year through the Date of
          Termination and the denominator of which is 365, payable when bonuses
          would have otherwise been payable had the Executive's employment not
          terminated and (ii) pay to the Executive, in a lump sum, an amount
          equal to the Annual Base Salary that the Executive would have been
          entitled to receive if the Executive had continued his employment
          hereunder for a period of 12 months following the Date of Termination.

     (b)  Termination without Cause. If the Executive's employment shall be
          terminated by the Company without Cause pursuant to Section 3(a)(iv)
          the Company shall, subject to the Executive signing and not revoking,
          within sixty days following delivery to Executive, a separation and
          release agreement in the form attached hereto:

          (i)  pay to the Executive, in a lump sum, an amount equal to the
               Annual Base Salary that the Executive would have been entitled to
               receive if the Executive had continued his employment hereunder
               for a period of 18 months following the Date of Termination;

          (ii) pay to the Executive an amount equal to the product of (x) the
               bonus that the Executive would have earned during the calendar
               year in which the Date of Termination occurs, if any, and (y) a
               fraction, the numerator of which is the number of days that
               elapsed in such calendar year through the Date of Termination and
               the denominator of which is 365, payable when bonuses would have
               otherwise been payable had the Executive's employment not
               terminated; and


                                       5



          (iii) cover the premium costs for medical benefits under COBRA for the
               Executive and, where applicable, his spouse and dependents, life
               insurance and disability insurance (all as in effect immediately
               prior to the Date of Termination) for a period of 12 months
               following the Date of Termination.

          If the Executive's employment shall be terminated by the Company
          without cause pursuant to Section 3(a)(iv), the Non-Competition
          Agreement dated December 27, 2005 between Parent and the Executive
          shall terminate on the earlier of the date it would have terminated
          without regard to this paragraph and a number of months after the Date
          of Termination equal to the number of months of Base Salary taken into
          account pursuant to Section 4(b)(i).

     (c)  Survival. The expiration or termination of the Term shall not impair
          the rights or obligations of any party hereto, which shall have
          accrued prior to such expiration or termination.

     (d)  409A. Notwithstanding anything to the contrary in this Section 4, no
          payments in this Section 4 will be paid during the six-month period
          following the Executive's termination of employment unless the Company
          determines, in its good faith judgment, that paying such amounts at
          the time or times indicated in this Section would not cause the
          Executive to incur an additional tax under Section 409A of the
          Internal Revenue Code of 1986, as amended (the "Code") (in which case
          such amounts shall be paid at the time or times indicated in this
          Section). If the payment of any amounts are delayed as a result of the
          previous sentence, on the first day following the end of the six-month
          period, the Company will pay the Executive a lump-sum amount equal to
          the cumulative amounts that would have otherwise been previously paid
          to the Executive under this Section 4. Thereafter, payments will
          resume in accordance with this Section.

5.   COMPETITION.

     (a)  The Executive shall not, at any time during the Term or during the
          two-year period following the Date of Termination, directly or
          indirectly engage in, have any equity interest in, or manage or
          operate any person, firm, corporation, partnership or business
          (whether as director, officer, employee, agent, representative,
          partner, security holder, consultant or otherwise) that engages in any
          business (x) which competes with any business of the Company anywhere
          in the States of California, Kansas, Missouri, Nevada or Texas, (y)
          which competes with any business of the Company in any State in which
          the Company operated a facility at any time (whether before or after
          the date of this Agreement) that the Executive was employed by the
          Company or (z) which derives $500,000,000 or more in annual
          consolidated revenues from the operation of skilled nursing facilities
          in the United States; provided, however, that the Executive shall be
          permitted to acquire a passive stock interest in such a business
          provided the stock acquired is publicly traded and is not more than
          five percent (5%) of the outstanding interest in such business.


                                       6



     (b)  The Executive shall not at any time during the Term or during the
          two-year period following the date of Termination, directly or
          indirectly, recruit or otherwise solicit or induce or encourage any
          employee, contractor, customer or supplier of the Company (i) to
          terminate its employment or arrangement with the Company, (ii) to
          otherwise change its relationship with the Company or (iii) to
          establish any relationship with the Executive or any other person,
          firm, corporation or other entity for any business purpose competitive
          with the business of the Company.

     (c)  In the event the terms of this Section 5 shall be determined by any
          court of competent jurisdiction to be unenforceable by reason of its
          extending for too great a period of time or over too great a
          geographical area or by reason of its being too extensive in any other
          respect, it will be interpreted to extend only over the maximum period
          of time for which it may be enforceable, over the maximum geographical
          area as to which it may be enforceable, or to the maximum extent in
          all other respects as to which it may be enforceable, all as
          determined by such court in such action.

     (d)  As used in this Section 5, the term "Company" shall include Parent,
          the Company and their respective direct or indirect subsidiaries.

6.   NONDISCLOSURE OF PROPRIETARY INFORMATION.

     (a)  Except in connection with the faithful performance of the Executive's
          duties hereunder or pursuant to Section 6(c), the Executive shall, in
          perpetuity, maintain in confidence and shall not directly, indirectly
          or otherwise, use, disseminate, disclose or publish, or use for his
          benefit or the benefit of any person, firm, corporation or other
          entity any confidential or proprietary information or trade secrets of
          or relating to the Company (including, without limitation,
          intellectual property in the form of patents, trademarks and
          copyrights and applications therefor, ideas, inventions, works,
          discoveries, improvements, information, documents, formulae,
          practices, processes, methods, developments, source code,
          modifications, technology, techniques, data, programs, other know-how
          or materials, owned, developed or possessed by the Company, whether in
          tangible or intangible form, information with respect to the Company's
          operations, processes, products, inventions, business practices,
          finances, principals, vendors, suppliers, customers, potential
          customers, marketing methods, costs, prices, contractual
          relationships, regulatory status, prospects and compensation paid to
          employees or other terms of employment), or deliver to any person,
          firm, corporation or other entity any document, record, notebook,
          computer program or similar repository of or containing any such
          confidential or proprietary information or trade secrets. The parties
          hereby stipulate and agree that as between them the foregoing matters
          are important, material and confidential proprietary information and
          trade secrets and affect the successful conduct of the businesses of
          the Company (and any successor or assignee of the Company).
          Confidential Information shall not include any information which has
          entered the public domain through no fault of the Executive.


                                       7



     (b)  Upon termination of the Executive's employment with the Company for
          any reason, the Executive will promptly deliver to the Company all
          correspondence, drawings, manuals, letters, notes, notebooks, reports,
          programs, plans, proposals, financial documents, or any other
          documents concerning the Company's customers, business plans,
          marketing strategies, products or processes.

     (c)  The Executive may respond to a lawful and valid subpoena or other
          legal process but shall give the Company the earliest possible notice
          thereof, shall, as much in advance of the return date as possible,
          make available to the Company and its counsel the documents and other
          information sought and shall assist such counsel at Company's expense
          in resisting or otherwise responding to such process.

     (d)  As used in this Section 6 and Section 7, the term "Company" shall
          include the Company and its direct or indirect parents, if any, and
          subsidiaries.

     (e)  Nothing in this Agreement shall prohibit the Executive from (i)
          disclosing information and documents when required by law, subpoena or
          court order (subject to the requirements of Section 6(c) above), (ii)
          disclosing information and documents to his attorney or tax adviser on
          a confidential basis for the purpose of securing legal or tax advice,
          (iii) disclosing the post-employment restrictions in this Agreement in
          confidence to any potential new employer, or (iv) retaining, at any
          time, his personal correspondence, his personal rolodex and documents
          related to his own personal benefits, entitlements and obligations.

7.   INVENTIONS.

     All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that the Executive may discover, invent or
originate during the Term, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company ("Inventions"),
shall be the exclusive property of the Company. The Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Executive hereby
appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.

8.   INJUNCTIVE RELIEF.

     It is recognized and acknowledged by the Executive that a breach of the
covenants contained in Sections 5, 6 and 7 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Sections 5, 6 and 7, in addition to any
other remedy


                                       8



which may be available at law or in equity, the Company will be entitled to
specific performance and temporary, preliminary and permanent injunctive relief.

9.   ASSIGNMENT AND SUCCESSORS.

     The Company may assign its rights and obligations under this Agreement to
any successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees,
and legatees, as applicable. None of the Executive's rights or obligations may
be assigned or transferred by the Executive, other than the Executive's rights
to payments hereunder, which may be transferred only by will or operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the
extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation
hereunder following his death by giving written notice thereof to the Company.

10.  CERTAIN DEFINITIONS.

     (a)  Cause. The Company shall have "Cause" to terminate the Term and the
          Executive's employment hereunder upon:

          (i)  the Executive's failure to perform substantially his duties as an
               employee of the Company (other than any such failure resulting
               from the Executive's incapacity due to physical or mental
               illness), which is not cured within 15 days after a written
               demand for performance is given to the Executive by the Board
               specifying in reasonable detail the manner in which the Executive
               has failed to perform substantially his duties as an employee of
               the Company;

          (ii) the Executive's failure to carry out, or comply with, in any
               material respect any lawful and reasonable directive of the Board
               consistent with the terms of this Agreement that, if capable of
               cure, is not cured by the Executive within 15 days after written
               notice given to the Executive describing such failure in
               reasonable detail;

          (iii) the Executive's conviction, plea of no contest, plea of nolo
               contendere, or imposition of unadjudicated probation for any
               felony or, to the extent involving fraud, dishonesty, theft,
               embezzlement or moral turpitude, any other crime;

          (iv) the Executive's violation of a material regulatory requirement
               relating to the business of the Company and its subsidiaries
               that, in the good faith judgment of the Board, is injurious to
               the Company in any material respect;


                                       9



          (v)  the Executive's unlawful use (including being under the
               influence) or possession of illegal drugs on the Company's
               premises or while performing the Executive's duties and
               responsibilities under this Agreement;

          (vi) the Executive's breach of this Agreement in any material respect
               that, if capable of cure, is not cured by the Executive within 15
               days after written notice given to the Executive describing such
               breach in reasonable detail; or

          (vii) the Executive's commission of an act of fraud, embezzlement,
               misappropriation, willful misconduct, gross negligence or breach
               of fiduciary duty with respect to the Company or any of its
               affiliates;

     (b)  Date of Termination. "Date of Termination" shall mean (i) if the
          Executive's employment is terminated by his death, the date of his
          death; (ii) if the Executive's employment is terminated pursuant to
          Section 3(a)(ii) - (v) either the date indicated in the Notice of
          Termination or the date specified by the Company pursuant to Section
          3(b), whichever is earlier; (iii) if the Executive's employment is
          terminated pursuant to Section 3(a)(vi) or Section 3(a)(vii), the
          expiration of the then-applicable Term.

     (c)  Disability. "Disability" shall mean, at any time the Company or any of
          its affiliates sponsors a long-term disability plan for the Company's
          employees in which the Executive participates, "disability" as defined
          in such long-term disability plan for the purpose of determining a
          participant's eligibility for benefits, provided, however, if the
          long-term disability plan contains multiple definitions of disability,
          "Disability" shall refer that definition of disability which, if the
          Executive qualified for such disability benefits, would provide
          coverage for the longest period of time. The determination of whether
          the Executive has a Disability shall be made by the person or persons
          required to make disability determinations under the long-term
          disability plan. At any time the Company does not sponsor a long-term
          disability plan for its employees in which the Executive participates,
          Disability shall mean the Executive's inability to perform, with or
          without reasonable accommodation, the essential functions of his
          position hereunder for a total of six months during any 12-month
          period as a result of incapacity due to mental or physical illness as
          determined by a physician selected by the Board and acceptable to the
          Executive or the Executive's legal representative, such agreement as
          to acceptability not to be unreasonably withheld or delayed. Any
          refusal by the Executive to submit to a medical examination for the
          purpose of determining Disability shall be deemed to constitute
          conclusive evidence of the Executive's Disability.

11.  GOVERNING LAW.

     This Agreement shall be governed, construed, interpreted and enforced in
accordance with its express terms, and otherwise in accordance with the
substantive laws of the State of


                                       10



California, without reference to the principles of conflicts of law, and where
applicable, the federal laws of the United States.

12.  VALIDITY.

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13.  NOTICES.

     Any notice, request, claim, demand, document and other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile or
certified or registered mail, postage prepaid, or any nationally recognized
overnight courier service with signature certification of receipt, as follows:

     (a)  If to the Company:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway
          Suite 200
          Foothill Ranch, California 92610
          Attn: General Counsel

          with copies to:

          Onex Partners LP
          712 Fifth Avenue
          New York, New York 10019
          Facsimile: (212) 582-0909
          Attention: Robert M. LeBlanc

          and:

          Kaye Scholer LLP
          425 Park Avenue
          New York, New York 10022
          Facsimile: (212) 836-8211
          Attention: Joel I. Greenberg

     (b)  If to the Executive:

          John E. King
          [_________________________]
          [_________________________]
          Facsimile: [__________]


                                       11



     or at any other address as any party shall have specified by notice in
writing to the other party.

14.  COUNTERPARTS.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement. Signatures delivered by facsimile shall be deemed effective
for all purposes.

15.  ENTIRE AGREEMENT.

     The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive by
the Company and supersede all prior understandings and agreements, whether
written or oral. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

16.  AMENDMENTS; WAIVERS.

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by the Executive and a duly authorized officer of
Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties with any specifically identified provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity. Except as otherwise set forth in this Agreement, the respective rights
and obligations of the parties under this Agreement shall survive any
termination of Executive's employment.

17.  NO INCONSISTENT ACTIONS.

     The parties hereto shall not voluntarily undertake or fail to undertake any
action or course of action inconsistent with the provisions or essential intent
of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.

18.  CONSTRUCTION.

     This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for convenience and are
not intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural;


                                       12



(b) "and" and "or" are each used both conjunctively and disjunctively; (c)
"any," "all," "each," or "every" means "any and all," and "each and every"; (d)
"includes" and "including" are each "without limitation"; (e) "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the entities or persons referred to may require.

19.  ARBITRATION.

     Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of the Executive's employment by the Company, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in Los Angeles County, California, before a sole neutral arbitrator
(the "Arbitrator"), mutually selected and agreeable to both parties and selected
from Judicial Arbitration and Mediation Services, Inc., Los Angeles County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the Arbitrator, such Arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure Sections 1280 et seq. as the exclusive forum
for the resolution of such dispute; provided, however, that provisional
injunctive relief (including, but not limited to, temporary restraining orders
and preliminary injunctions) may, but need not, be sought by either party to
this Amended Agreement in any court of competent jurisdiction while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator; no bond or other security shall be required in connection therewith.

     Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of
the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator's award or
decision is based. Any award or relief granted by the Arbitrator hereunder shall
be final and binding on the parties hereto and may be enforced by any court of
competent jurisdiction.

     The parties acknowledge and agree that they are hereby waiving any rights
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Amended Agreement or the services
rendered hereunder. The parties agree that the Company Shall be responsible for
payment of the forum costs of any arbitration hereunder, including the
Arbitrator's fee. The Executive and the Company further agree that in any
proceeding to enforce the terms of this Amended Agreement, the prevailing party
shall be entitled to its or her reasonable attorneys' fees and costs (other than
forum costs associated with the arbitration) incurred by it or him in connection
with resolution of the dispute up to a maximum of Fifty Thousand Dollars
($50,000.00) in addition to any other relief granted.


                                       13



20.  ENFORCEMENT.

     If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21.  WITHHOLDING.

     The Company shall be entitled to withhold from any amounts payable under
this Agreement any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

22.  INDEMNIFICATION.

     The Company agrees that (a) if the Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding whether civil, criminal, administrative, investigative, appellate or
other (a "Proceeding") by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or (b) if any claim, demand, request, investigation, controversy, threat,
discovery request or request for testimony or information (a "Claim") is made,
or threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted by
the laws of the state of incorporation of the Company, against any and all
costs, expenses, liabilities and losses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company and shall inure to the
benefit of the Executive's heirs, executors and administrators. The Company may
assume the defense of any Proceeding or Claim with counsel selected by the
Company and reasonably satisfactory to the Executive and, if it does so, the
Executive shall not be entitled to be reimbursed for any separate counsel he may
retain in connection with such Proceeding or Claim.

     Neither the failure of the Company (including its Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification that the Executive has satisfied any applicable
standard of conduct, nor a determination by the Company (including its Board,
independent legal counsel or stockholders) that the Executive has not met any
applicable standard of conduct, shall create a presumption that the Executive
has not met an applicable standard of conduct.

     During the period of Employment and for a period of time thereafter
determined as provided below, the Company shall keep in place a directors and
officers' liability insurance


                                       14



policy (or policies) providing coverage, or such coverage may be provided under
a policy that provides coverage to Onex Corporation or Onex Partners LP and
their affiliates, to the Executive if and to the extent that the Company
provides such coverage to its directors and such coverage (or other directors
and officers liability insurance coverage) shall continue after the termination
of the Period of Employment if and for the period of time that such coverage is
extended to the Company's former director, other than former directors who are
employees of Onex Corporation, Onex Partners LP or their affiliates.

23.  COOPERATION IN LITIGATION.

     The Executive promises and agrees that, following the date his employment
by the Company terminates, he will reasonably cooperate with the Company in any
litigation in which the Company is a party or otherwise involved which arises
out of events occurring prior to the termination of his employment, including
but not limited to, serving as a consultant (at a reasonable hourly rate) or
witness and producing documents and information relevant to the case or helpful
to the Company.

24.  EMPLOYEE ACKNOWLEDGEMENT.

     The Executive acknowledges that he has read and understands this Agreement,
is fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.


                                       15



     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Boyd W. Hendrickson
                                        Title: Chief Executive Officer


                                        EXECUTIVE


                                        By:
                                            ------------------------------------
                                        Name: John E. King

                    [SIGNATURE PAGE -- EMPLOYMENT AGREEMENT]



                                     ANNEX A

EX-10.7

                                                                    Exhibit 10.7

                              EMPLOYMENT AGREEMENT

     This Employment Agreement dated as of December 27, 2005 (the "Agreement"),
is made by and between Skilled Healthcare Group, Inc., a Delaware corporation
(together with any successor thereto, the "Company") and Roland G. Rapp (the
"Executive").

                                    RECITALS

A.   It is the desire of the Company to assure itself of the continued services
     of the Executive by entering into this Agreement.

B.   The Executive and the Company mutually desire that Executive provide
     services to the Company on the terms herein provided.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

1.   EMPLOYMENT.

     (a)  General. The Company shall employ the Executive and the Executive
          shall enter the employ of the Company, for the period set forth in
          Section 1(b), in the position set forth in Section 1(c), and upon the
          other terms and conditions herein provided.

     (b)  Employment Term. The initial term of employment under this Agreement
          (the "Initial Term") shall be for the period beginning on the Closing,
          as such term is defined in the Agreement and Plan of Merger (the
          "Merger Agreement"), dated as of October 22, 2005 among the Company,
          SHG Holding Solutions, Inc., a Delaware corporation ("Parent"), SHG
          Acquisition Corp., a Delaware corporation, Heritage Partners
          Management Company, LLP, Heritage Fund II, L.P., a Delaware limited
          partnership, and Heritage Investors II, L.L.C., a Delaware limited
          liability company (the date of such Closing is the "Effective Date")
          and ending on (and including) the second anniversary thereof, unless
          earlier terminated as provided in Section 3. Should the Closing not
          occur, this Agreement shall be null and void and shall not become
          effective. The employment term hereunder shall automatically be
          extended for successive one-year periods ("Extension Terms" and,
          collectively with the Initial Term, the "Term") unless either party
          gives written notice of non-extension to the other no later than sixty
          (60) days prior to the expiration of the then-applicable Term and
          subject to earlier termination as provided in Section 3.

     (c)  Position and Duties. The Executive shall serve as the General Counsel,
          Secretary and Chief Administrative Officer of the Company with such
          customary responsibilities, duties and authority as may from time to
          time be assigned to the Executive by the Chief Executive Officer of
          the Company, the Board of Directors of the Company (the "Board") or by
          the Board of Directors of Parent. The



          Executive shall devote substantially all his working time and efforts
          to the business and affairs of the Company (which may include service
          to Parent, the Company and their respective direct and indirect
          subsidiaries). The Executive agrees to observe and comply with the
          rules and policies of the Company as adopted by or under the authority
          of the Board from time to time. During the Term, it shall not be a
          violation of this Agreement for the Executive to serve on industry
          trade, civic or charitable boards or committees and manage his
          personal investments and affairs, as long as such activities do not
          materially interfere with the performance of the Executive's duties
          and responsibilities as an employee of the Company. During his
          employment and following termination of his employment with the
          Company, the Executive agrees not to disparage the Company, any of its
          products or practices, or any of its directors, officers, agents,
          representatives, stockholders or affiliates, either orally or in
          writing.

     (d)  Location. The Executive acknowledges that the Company's principal
          executive offices are currently located at Foothill Ranch, California.
          The Executive shall operate principally out of such executive offices,
          as they may be moved from time to time within 40 miles of their
          current location in Foothill Ranch, California. The Company expects,
          and the Executive agrees, that the Executive shall be required to
          travel from time to time in order to fulfill his duties to the
          Company.

2.   COMPENSATION AND RELATED MATTERS.

     (a)  Annual Base Salary. During the Term, the Executive shall receive a
          base salary at a rate of $335,000 per annum (the "Annual Base
          Salary"), which shall be paid in accordance with the customary payroll
          practices of the Company, subject to upward adjustment as may be
          determined by the Board in its discretion.

     (b)  Annual Bonus. During the Term, the Executive will be eligible to
          participate in an annual performance-based bonus plan established by
          the Board that provides an opportunity substantially the same as the
          bonus plan first adopted by the Board after the Effective Date.

     (c)  Restricted Stock Plan. During the Term, the Executive shall be
          entitled to participate in the equity plan (the "Restricted Stock
          Plan") of Parent pursuant to which, on the Effective Date, the
          Executive shall receive a number of shares of common stock of Parent
          equal to 1.2500% of the number of shares of common stock of Parent
          outstanding on the Effective Date, excluding shares issued under the
          Restricted Stock Plan. Restricted Stock shall vest as to 25% of the
          shares granted on the Effective Date and each of the first three
          anniversaries of the Effective Date, but only to the extent the
          Executive remains continuously employed by the Company through the
          applicable vesting date.

     (d)  Benefits. During the Term, the Executive shall be entitled to
          participate in group medical insurance, 401(k) and other standard
          benefits provided by the Company, as may be amended from time to time,
          which are applicable to the senior officers of the Company.


                                       2



     (e)  Vacation. During the Term, the Executive shall be entitled to four
          weeks paid vacation per calendar year and the maximum unused vacation
          time that the Executive may accrue is eight weeks. Any vacation shall
          be taken at the reasonable and mutual convenience of the Company and
          the Executive.

     (f)  Expenses. During the Term, the Company shall reimburse the Executive
          for all reasonable travel and other business expenses incurred by him
          in the performance of his duties to the Company in accordance with the
          Company's expense reimbursement policy.

     (g)  Key Person Insurance. At any time during the Term, the Company shall
          have the right to insure the life of the Executive for the Company's
          sole benefit. The Company shall have the right to determine the amount
          of insurance and the type of policy. The Executive shall cooperate
          with the Company in obtaining such insurance by submitting to physical
          examinations, by supplying all information reasonably required by any
          insurance carrier, and by executing all necessary documents reasonably
          required by any insurance carrier. The Executive shall incur no
          financial obligation by executing any required document, and shall
          have no interest in any such policy.

     (h)  Medical Examination. During the Term, the Company shall bear the
          expense of an annual medical examination of the Executive at the
          Coopers Clinic or another facility selected by the Executive and
          reasonably satisfactory to the Company.

     (i)  Annual Review. Approximately every 12 months during the Term, the
          Executive and the Company's Chief Executive Officer, Board or
          appropriate committee of the Board shall meet to discuss the
          Executive's performance and terms of the Executive's employment by the
          Company.

3.   TERMINATION.

     The Term and the Executive's employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this Agreement
only under the following circumstances:

     (a)  Circumstances.

          (i)  Death. The Term and the Executive's employment hereunder shall
               terminate upon his death.

          (ii) Disability. If the Executive has incurred a Disability, the
               Company may terminate the Term and the Executive's employment
               hereunder.

          (iii) Termination for Cause. The Company may terminate the Term and
               the Executive's employment hereunder for Cause.

          (iv) Termination without Cause. The Company may terminate the Term and
               the Executive's employment hereunder without Cause.


                                       3



          (v)  Resignation by the Executive. The Executive may resign his
               employment and terminate the Term for any reason.

          (vi) Non-extension of Term by the Company. The Company may give notice
               of non-extension to the Executive pursuant to Section 1(b).

          (vii) Non-extension of Term by the Executive. The Executive may give
               notice of non-extension to the Company pursuant to Section 1(b).

     (b)  Notice of Termination. Any termination of the Executive's employment
          by the Company or by the Executive under this Section 3 (other than
          termination pursuant to paragraph (a)(i)) shall be communicated by a
          written notice to the other party indicating the specific termination
          provision in this Agreement relied upon, and specifying a Date of
          Termination which, if submitted by the Executive, shall be at least
          two weeks following the date of such notice (a "Notice of
          Termination"). A Notice of Termination submitted by the Company may
          provide for a Date of Termination on the date the Executive receives
          the Notice of Termination, or any date thereafter elected by the
          Company in its sole discretion.

     (c)  Company obligations upon termination. Upon termination of the
          Executive's employment, the Executive (or the Executive's estate)
          shall be entitled to receive the sum of the Executive's Annual Base
          Salary through the Date of Termination not theretofore paid, any
          expenses owed to the Executive under Section 2(f), any accrued
          vacation pay owed to the Executive pursuant to Section 2(e), and any
          amount accrued and arising from the Executive's participation in, or
          benefits accrued under any employee benefit plans, programs or
          arrangements under Section 2(d), which amounts shall be payable in
          accordance with the terms and conditions of such employee benefit
          plans, programs or arrangements, and such other or additional benefits
          as may be, or become, due to him under the applicable terms of
          applicable plans, programs, agreements, corporate governance documents
          and other arrangements of the Company and its parent and subsidiaries
          (collectively, the "Company Arrangements").

4.   SEVERANCE PAYMENTS.

     (a)  Termination for Cause, Resignation by the Executive, Non-extension of
          Term by the Executive or the Company, death or Disability. If the
          Executive's employment is terminated pursuant to Section 3(a)(iii) for
          Cause, pursuant to Section 3(a)(v) for Resignation by the Executive,
          or pursuant to Section 3(a)(vii) due to non-extension of the Term by
          the Executive, the Executive shall not be entitled to any severance
          payment or benefits. If the Executive's employment is terminated
          pursuant to Section 3(a)(i) as a result of Executive's death or
          pursuant to Section 3(a)(ii) as a result of the Executive's
          Disability, the Company shall, subject to the Executive signing and
          not revoking, within sixty days following delivery to Executive, a
          separation and release agreement in the form attached hereto, (i) pay
          to the Executive an amount equal to the product of (x) the bonus that
          the Executive would have earned during the calendar year in which the
          Date


                                       4



          of Termination occurs, if any, and (y) a fraction, the numerator of
          which is the number of days that elapsed in such calendar year through
          the Date of Termination and the denominator of which is 365, payable
          when bonuses would have otherwise been payable had the Executive's
          employment not terminated and (ii) in the case of termination pursuant
          to Section 3(a)(ii) as a result of the Executive's Disability, pay to
          the Executive an amount equal to the excess, if any, of (x) the amount
          that would have been payable to the Executive pursuant to Section
          4(b)(i) if the Executive had been terminated by the Company without
          Cause pursuant to Section 3(a)(iv) over (y) the present value of the
          benefits to be received by the Executive (or his beneficiaries) under
          any disability plan sponsored by the Company or its affiliates (for
          purposes of this clause (ii) the amounts in (x) and (y) shall be
          determined by the Company on an after-tax basis to the extent that
          their receipt by the Executive (or his beneficiaries) would be subject
          to tax and on actuarial assumptions satisfactory to the Company). If
          the Executive's employment is terminated pursuant to Section 3(a)(vi)
          due to non-extension of the Term by the Company, the Company shall,
          subject to the Executive signing and not revoking, within sixty days
          following delivery to Executive, a separation and release agreement in
          the form attached hereto at Annex A, (i) pay to the Executive an
          amount equal to the product of (x) the bonus that the Executive would
          have earned during the calendar year in which the Date of Termination
          occurs, if any, and (y) a fraction, the numerator of which is the
          number of days that elapsed in such calendar year through the Date of
          Termination and the denominator of which is 365, payable when bonuses
          would have otherwise been payable had the Executive's employment not
          terminated and (ii) pay to the Executive, in a lump sum, an amount
          equal to the Annual Base Salary that the Executive would have been
          entitled to receive if the Executive had continued his employment
          hereunder for a period of 12 months following the Date of Termination.

     (b)  Termination without Cause. If the Executive's employment shall be
          terminated by the Company without Cause pursuant to Section 3(a)(iv)
          the Company shall, subject to the Executive signing and not revoking,
          within sixty days following delivery to Executive, a separation and
          release agreement in the form attached hereto:

          (i)  pay to the Executive, in a lump sum, an amount equal to the
               Annual Base Salary that the Executive would have been entitled to
               receive if the Executive had continued his employment hereunder
               for a period of 18 months following the Date of Termination;

          (ii) pay to the Executive an amount equal to the product of (x) the
               bonus that the Executive would have earned during the calendar
               year in which the Date of Termination occurs, if any, and (y) a
               fraction, the numerator of which is the number of days that
               elapsed in such calendar year through the Date of Termination and
               the denominator of which is 365, payable when bonuses would have
               otherwise been payable had the Executive's employment not
               terminated; and


                                       5



          (iii) cover the premium costs for medical benefits under COBRA for the
               Executive and, where applicable, his spouse and dependents, life
               insurance and disability insurance (all as in effect immediately
               prior to the Date of Termination) for a period of 12 months
               following the Date of Termination.

          If the Executive's employment shall be terminated by the Company
          without cause pursuant to Section 3(a)(iv), the Non-Competition
          Agreement dated December 27, 2005 between Parent and the Executive
          shall terminate on the earlier of the date it would have terminated
          without regard to this paragraph and a number of months after the Date
          of Termination equal to the number of months of Base Salary taken into
          account pursuant to Section 4(b)(i).

     (c)  Survival. The expiration or termination of the Term shall not impair
          the rights or obligations of any party hereto, which shall have
          accrued prior to such expiration or termination.

     (d)  409A. Notwithstanding anything to the contrary in this Section 4, no
          payments in this Section 4 will be paid during the six-month period
          following the Executive's termination of employment unless the Company
          determines, in its good faith judgment, that paying such amounts at
          the time or times indicated in this Section would not cause the
          Executive to incur an additional tax under Section 409A of the
          Internal Revenue Code of 1986, as amended (the "Code") (in which case
          such amounts shall be paid at the time or times indicated in this
          Section). If the payment of any amounts are delayed as a result of the
          previous sentence, on the first day following the end of the six-month
          period, the Company will pay the Executive a lump-sum amount equal to
          the cumulative amounts that would have otherwise been previously paid
          to the Executive under this Section 4. Thereafter, payments will
          resume in accordance with this Section.

5.   COMPETITION.

     (a)  The Executive shall not, at any time during the Term or during the
          two-year period following the Date of Termination, directly or
          indirectly engage in, have any equity interest in, or manage or
          operate any person, firm, corporation, partnership or business
          (whether as director, officer, employee, agent, representative,
          partner, security holder, consultant or otherwise) that engages in any
          business (x) which competes with any business of the Company anywhere
          in the States of California, Kansas, Missouri, Nevada or Texas, (y)
          which competes with any business of the Company in any State in which
          the Company operated a facility at any time (whether before or after
          the date of this Agreement) that the Executive was employed by the
          Company or (z) which derives $500,000,000 or more in annual
          consolidated revenues from the operation of skilled nursing facilities
          in the United States; provided, however, that the Executive shall be
          permitted to acquire a passive stock interest in such a business
          provided the stock acquired is publicly traded and is not more than
          five percent (5%) of the outstanding interest in such business.


                                       6



     (b)  The Executive shall not at any time during the Term or during the
          two-year period following the date of Termination, directly or
          indirectly, recruit or otherwise solicit or induce or encourage any
          employee, contractor, customer or supplier of the Company (i) to
          terminate its employment or arrangement with the Company, (ii) to
          otherwise change its relationship with the Company or (iii) to
          establish any relationship with the Executive or any other person,
          firm, corporation or other entity for any business purpose competitive
          with the business of the Company.

     (c)  In the event the terms of this Section 5 shall be determined by any
          court of competent jurisdiction to be unenforceable by reason of its
          extending for too great a period of time or over too great a
          geographical area or by reason of its being too extensive in any other
          respect, it will be interpreted to extend only over the maximum period
          of time for which it may be enforceable, over the maximum geographical
          area as to which it may be enforceable, or to the maximum extent in
          all other respects as to which it may be enforceable, all as
          determined by such court in such action.

     (d)  As used in this Section 5, the term "Company" shall include Parent,
          the Company and their respective direct or indirect subsidiaries.

     (e)  The Company acknowledges that, as of the Effective Date, the Executive
          owns (but does not operate) the long-term care facilities identified
          on Schedule 1 hereto. The Company agrees that such ownership interests
          shall not constitute a breach of Section 1(c) or this Section 5 by the
          Executive; provided that (1) the Executive does not acquire any
          additional ownership interests in long-term care facilities, (2) the
          Executive is not actively involved in the operation of any of such
          long-term care facilities, and (3) such ownership interests do not
          otherwise materially interfere with the Executive's duties to the
          Company hereunder.

6.   NONDISCLOSURE OF PROPRIETARY INFORMATION.

     (a)  Except in connection with the faithful performance of the Executive's
          duties hereunder or pursuant to Section 6(c), the Executive shall, in
          perpetuity, maintain in confidence and shall not directly, indirectly
          or otherwise, use, disseminate, disclose or publish, or use for his
          benefit or the benefit of any person, firm, corporation or other
          entity any confidential or proprietary information or trade secrets of
          or relating to the Company (including, without limitation,
          intellectual property in the form of patents, trademarks and
          copyrights and applications therefor, ideas, inventions, works,
          discoveries, improvements, information, documents, formulae,
          practices, processes, methods, developments, source code,
          modifications, technology, techniques, data, programs, other know-how
          or materials, owned, developed or possessed by the Company, whether in
          tangible or intangible form, information with respect to the Company's
          operations, processes, products, inventions, business practices,
          finances, principals, vendors, suppliers, customers, potential
          customers, marketing methods, costs, prices, contractual
          relationships, regulatory status, prospects and compensation paid to
          employees or other terms of employment), or deliver to any person,
          firm, corporation or other


                                       7



          entity any document, record, notebook, computer program or similar
          repository of or containing any such confidential or proprietary
          information or trade secrets. The parties hereby stipulate and agree
          that as between them the foregoing matters are important, material and
          confidential proprietary information and trade secrets and affect the
          successful conduct of the businesses of the Company (and any successor
          or assignee of the Company). Confidential Information shall not
          include any information which has entered the public domain through no
          fault of the Executive.

     (b)  Upon termination of the Executive's employment with the Company for
          any reason, the Executive will promptly deliver to the Company all
          correspondence, drawings, manuals, letters, notes, notebooks, reports,
          programs, plans, proposals, financial documents, or any other
          documents concerning the Company's customers, business plans,
          marketing strategies, products or processes.

     (c)  The Executive may respond to a lawful and valid subpoena or other
          legal process but shall give the Company the earliest possible notice
          thereof, shall, as much in advance of the return date as possible,
          make available to the Company and its counsel the documents and other
          information sought and shall assist such counsel at Company's expense
          in resisting or otherwise responding to such process.

     (d)  As used in this Section 6 and Section 7, the term "Company" shall
          include the Company and its direct or indirect parents, if any, and
          subsidiaries.

     (e)  Nothing in this Agreement shall prohibit the Executive from (i)
          disclosing information and documents when required by law, subpoena or
          court order (subject to the requirements of Section 6(c) above), (ii)
          disclosing information and documents to his attorney or tax adviser on
          a confidential basis for the purpose of securing legal or tax advice,
          (iii) disclosing the post-employment restrictions in this Agreement in
          confidence to any potential new employer, or (iv) retaining, at any
          time, his personal correspondence, his personal rolodex and documents
          related to his own personal benefits, entitlements and obligations.

7.   INVENTIONS.

     All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that the Executive may discover, invent or
originate during the Term, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company ("Inventions"),
shall be the exclusive property of the Company. The Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Executive hereby
appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.


                                       8



8.   INJUNCTIVE RELIEF.

     It is recognized and acknowledged by the Executive that a breach of the
covenants contained in Sections 5, 6 and 7 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Sections 5, 6 and 7, in addition to any
other remedy which may be available at law or in equity, the Company will be
entitled to specific performance and temporary, preliminary and permanent
injunctive relief.

9.   ASSIGNMENT AND SUCCESSORS.

     The Company may assign its rights and obligations under this Agreement to
any successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees,
and legatees, as applicable. None of the Executive's rights or obligations may
be assigned or transferred by the Executive, other than the Executive's rights
to payments hereunder, which may be transferred only by will or operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the
extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation
hereunder following his death by giving written notice thereof to the Company.

10.  CERTAIN DEFINITIONS.

     (a)  Cause. The Company shall have "Cause" to terminate the Term and the
          Executive's employment hereunder upon:

          (i)  the Executive's failure to perform substantially his duties as an
               employee of the Company (other than any such failure resulting
               from the Executive's incapacity due to physical or mental
               illness), which is not cured within 15 days after a written
               demand for performance is given to the Executive by the Board
               specifying in reasonable detail the manner in which the Executive
               has failed to perform substantially his duties as an employee of
               the Company;

          (ii) the Executive's failure to carry out, or comply with, in any
               material respect any lawful and reasonable directive of the Board
               consistent with the terms of this Agreement that, if capable of
               cure, is not cured by the Executive within 15 days after written
               notice given to the Executive describing such failure in
               reasonable detail;

          (iii) the Executive's conviction, plea of no contest, plea of nolo
               contendere, or imposition of unadjudicated probation for any
               felony or, to the extent involving fraud, dishonesty, theft,
               embezzlement or moral turpitude, any other crime;


                                       9



          (iv) the Executive's violation of a material regulatory requirement
               relating to the business of the Company and its subsidiaries
               that, in the good faith judgment of the Board, is injurious to
               the Company in any material respect;

          (v)  the Executive's unlawful use (including being under the
               influence) or possession of illegal drugs on the Company's
               premises or while performing the Executive's duties and
               responsibilities under this Agreement;

          (vi) the Executive's breach of this Agreement in any material respect
               that, if capable of cure, is not cured by the Executive within 15
               days after written notice given to the Executive describing such
               breach in reasonable detail; or

          (vii) the Executive's commission of an act of fraud, embezzlement,
               misappropriation, willful misconduct, gross negligence or breach
               of fiduciary duty with respect to the Company or any of its
               affiliates;

     (b)  Date of Termination. "Date of Termination" shall mean (i) if the
          Executive's employment is terminated by his death, the date of his
          death; (ii) if the Executive's employment is terminated pursuant to
          Section 3(a)(ii) - (v) either the date indicated in the Notice of
          Termination or the date specified by the Company pursuant to Section
          3(b), whichever is earlier; (iii) if the Executive's employment is
          terminated pursuant to Section 3(a)(vi) or Section 3(a)(vii), the
          expiration of the then-applicable Term.

     (c)  Disability. "Disability" shall mean, at any time the Company or any of
          its affiliates sponsors a long-term disability plan for the Company's
          employees in which the Executive participates, "disability" as defined
          in such long-term disability plan for the purpose of determining a
          participant's eligibility for benefits, provided, however, if the
          long-term disability plan contains multiple definitions of disability,
          "Disability" shall refer that definition of disability which, if the
          Executive qualified for such disability benefits, would provide
          coverage for the longest period of time. The determination of whether
          the Executive has a Disability shall be made by the person or persons
          required to make disability determinations under the long-term
          disability plan. At any time the Company does not sponsor a long-term
          disability plan for its employees in which the Executive participates,
          Disability shall mean the Executive's inability to perform, with or
          without reasonable accommodation, the essential functions of his
          position hereunder for a total of six months during any 12-month
          period as a result of incapacity due to mental or physical illness as
          determined by a physician selected by the Board and acceptable to the
          Executive or the Executive's legal representative, such agreement as
          to acceptability not to be unreasonably withheld or delayed. Any
          refusal by the Executive to submit to a medical examination for the
          purpose of determining Disability shall be deemed to constitute
          conclusive evidence of the Executive's Disability.


                                       10



11.  GOVERNING LAW.

     This Agreement shall be governed, construed, interpreted and enforced in
accordance with its express terms, and otherwise in accordance with the
substantive laws of the State of California, without reference to the principles
of conflicts of law, and where applicable, the federal laws of the United
States.

12.  VALIDITY.

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13.  NOTICES.

     Any notice, request, claim, demand, document and other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile or
certified or registered mail, postage prepaid, or any nationally recognized
overnight courier service with signature certification of receipt, as follows:

     (a)  If to the Company:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway
          Suite 200
          Foothill Ranch, California  92610
          Attn:  Chief Executive Officer

          with copies to:

          Onex Partners LP
          712 Fifth Avenue
          New York, New York  10019
          Facsimile:  (212) 582-0909
          Attention:  Robert M. LeBlanc

          and:

          Kaye Scholer LLP
          425 Park Avenue
          New York, New York  10022
          Facsimile:  (212) 836-8211
          Attention:  Joel I. Greenberg


                                       11



     (b)  If to the Executive:

          Roland G. Rapp

          [__________________________]
          [__________________________]
          Facsimile:  [_____________]

     or at any other address as any party shall have specified by notice in
writing to the other party.

14.  COUNTERPARTS.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement. Signatures delivered by facsimile shall be deemed effective
for all purposes.

15.  ENTIRE AGREEMENT.

     The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive by
the Company and supersede all prior understandings and agreements, whether
written or oral. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

16.  AMENDMENTS; WAIVERS.

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by the Executive and a duly authorized officer of
Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties with any specifically identified provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity. Except as otherwise set forth in this Agreement, the respective rights
and obligations of the parties under this Agreement shall survive any
termination of Executive's employment.

17.  NO INCONSISTENT ACTIONS.

     The parties hereto shall not voluntarily undertake or fail to undertake any
action or course of action inconsistent with the provisions or essential intent
of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.


                                       12



18.  CONSTRUCTION.

     This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for convenience and are
not intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural; (b) "and" and "or" are each used
both conjunctively and disjunctively; (c) "any," "all," "each," or "every" means
"any and all," and "each and every"; (d) "includes" and "including" are each
"without limitation"; (e) "herein," "hereof," "hereunder" and other similar
compounds of the word "here" refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (f) all pronouns
and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the entities or persons referred
to may require.

19.  ARBITRATION.

     Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of the Executive's employment by the Company, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in Los Angeles County, California, before a sole neutral arbitrator
(the "Arbitrator"), mutually selected and agreeable to both parties and selected
from Judicial Arbitration and Mediation Services, Inc., Los Angeles County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the Arbitrator, such Arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure Sections 1280 et seq. as the exclusive forum
for the resolution of such dispute; provided, however, that provisional
injunctive relief (including, but not limited to, temporary restraining orders
and preliminary injunctions) may, but need not, be sought by either party to
this Amended Agreement in any court of competent jurisdiction while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator; no bond or other security shall be required in connection therewith.

     Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of
the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator's award or
decision is based. Any award or relief granted by the Arbitrator hereunder shall
be final and binding on the parties hereto and may be enforced by any court of
competent jurisdiction.

     The parties acknowledge and agree that they are hereby waiving any rights
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Amended Agreement or the services
rendered hereunder. The parties agree that the Company


                                       13



Shall be responsible for payment of the forum costs of any arbitration
hereunder, including the Arbitrator's fee. The Executive and the Company further
agree that in any proceeding to enforce the terms of this Amended Agreement, the
prevailing party shall be entitled to its or her reasonable attorneys' fees and
costs (other than forum costs associated with the arbitration) incurred by it or
him in connection with resolution of the dispute up to a maximum of Fifty
Thousand Dollars ($50,000.00) in addition to any other relief granted.

20.  ENFORCEMENT.

     If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21.  WITHHOLDING.

     The Company shall be entitled to withhold from any amounts payable under
this Agreement any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

22.  INDEMNIFICATION.

     The Company agrees that (a) if the Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding whether civil, criminal, administrative, investigative, appellate or
other (a "Proceeding") by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or (b) if any claim, demand, request, investigation, controversy, threat,
discovery request or request for testimony or information (a "Claim") is made,
or threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted by
the laws of the state of incorporation of the Company, against any and all
costs, expenses, liabilities and losses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company and shall inure to the
benefit of the Executive's heirs, executors and administrators. The Company may
assume the defense of any Proceeding or Claim with counsel selected by the
Company and reasonably satisfactory to the Executive and, if it does so, the
Executive shall not be entitled to be reimbursed for any separate counsel he may
retain in connection with such Proceeding or Claim.

     Neither the failure of the Company (including its Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification


                                       14



that the Executive has satisfied any applicable standard of conduct, nor a
determination by the Company (including its Board, independent legal counsel or
stockholders) that the Executive has not met any applicable standard of conduct,
shall create a presumption that the Executive has not met an applicable standard
of conduct.

     During the period of Employment and for a period of time thereafter
determined as provided below, the Company shall keep in place a directors and
officers' liability insurance policy (or policies) providing coverage, or such
coverage may be provided under a policy that provides coverage to Onex
Corporation or Onex Partners LP and their affiliates, to the Executive if and to
the extent that the Company provides such coverage to its directors and such
coverage (or other directors and officers liability insurance coverage) shall
continue after the termination of the Period of Employment if and for the period
of time that such coverage is extended to the Company's former director, other
than former directors who are employees of Onex Corporation, Onex Partners LP or
their affiliates.

23.  COOPERATION IN LITIGATION.

     The Executive promises and agrees that, following the date his employment
by the Company terminates, he will reasonably cooperate with the Company in any
litigation in which the Company is a party or otherwise involved which arises
out of events occurring prior to the termination of his employment, including
but not limited to, serving as a consultant (at a reasonable hourly rate) or
witness and producing documents and information relevant to the case or helpful
to the Company.

24.  EMPLOYEE ACKNOWLEDGEMENT.

     The Executive acknowledges that he has read and understands this Agreement,
is fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.


                                       15



     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By:
                                            ------------------------------------
                                            Name: Boyd W. Hendrickson
                                            Title: Chief Executive Officer


                                        EXECUTIVE


                                        By:
                                            ------------------------------------
                                            Name: Roland G. Rapp

                    [SIGNATURE PAGE -- EMPLOYMENT AGREEMENT]



                                   SCHEDULE 1

1.   St. Francis Extended Care, Inc.

2.   St. Michael Consultant Hospital, Inc. dba Vintage Estate of Hayward

3.   Vintage Estates, Inc. dba Vintage Estates of Sacramento

4.   Vintage Estates III, Inc. dba Vintage Estates of Richmond



                                     ANNEX A

EX-10.8

                                                                    Exhibit 10.8

                              EMPLOYMENT AGREEMENT

     This Employment Agreement dated as of December 27, 2005 (the "Agreement"),
is made by and between Skilled Healthcare Group, Inc., a Delaware corporation
(together with any successor thereto, the "Company") and Mark Wortley (the
"Executive").

                                    RECITALS

A.   It is the desire of the Company to assure itself of the continued services
     of the Executive by entering into this Agreement.

B.   The Executive and the Company mutually desire that Executive provide
     services to the Company on the terms herein provided.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below the parties hereto agree as follows:

1.   EMPLOYMENT.

     (a)  General. The Company shall employ the Executive and the Executive
          shall enter the employ of the Company, for the period set forth in
          Section 1(b), in the position set forth in Section 1(c), and upon the
          other terms and conditions herein provided.

     (b)  Employment Term. The initial term of employment under this Agreement
          (the "Initial Term") shall be for the period beginning on the Closing,
          as such term is defined in the Agreement and Plan of Merger (the
          "Merger Agreement"), dated as of October 22, 2005 among the Company,
          SHG Holding Solutions, Inc., a Delaware corporation ("Parent"), SHG
          Acquisition Corp., a Delaware corporation, Heritage Partners
          Management Company, LLP, Heritage Fund II, L.P., a Delaware limited
          partnership, and Heritage Investors II, L.L.C., a Delaware limited
          liability company (the date of such Closing is the "Effective Date")
          and ending on (and including) the second anniversary thereof, unless
          earlier terminated as provided in Section 3. Should the Closing not
          occur, this Agreement shall be null and void and shall not become
          effective. The employment term hereunder shall automatically be
          extended for successive one-year periods ("Extension Terms" and,
          collectively with the Initial Term, the "Term") unless either party
          gives written notice of non-extension to the other no later than sixty
          (60) days prior to the expiration of the then-applicable Term and
          subject to earlier termination as provided in Section 3.

     (c)  Position and Duties. The Executive shall serve as the Executive Vice
          President and President of Ancillary Subsidiaries of the Company with
          such customary responsibilities, duties and authority as may from time
          to time be assigned to the Executive by the Chief Executive Officer of
          the Company, the Board of Directors of the Company (the "Board") or by
          the Board of Directors of Parent. The



          Executive shall devote substantially all his working time and efforts
          to the business and affairs of the Company (which may include service
          to Parent, the Company and their respective direct and indirect
          subsidiaries). The Executive agrees to observe and comply with the
          rules and policies of the Company as adopted by or under the authority
          of the Board from time to time. During the Term, it shall not be a
          violation of this Agreement for the Executive to serve on industry
          trade, civic or charitable boards or committees and manage his
          personal investments and affairs, as long as such activities do not
          materially interfere with the performance of the Executive's duties
          and responsibilities as an employee of the Company. During his
          employment and following termination of his employment with the
          Company, the Executive agrees not to disparage the Company, any of its
          products or practices, or any of its directors, officers, agents,
          representatives, stockholders or affiliates, either orally or in
          writing.

     (d)  Location. The Executive acknowledges that the Company's principal
          executive offices are currently located at Foothill Ranch, California.
          The Executive shall operate principally out of such executive offices,
          as they may be moved from time to time within 40 miles of their
          current location in Foothill Ranch, California. The Company expects,
          and the Executive agrees, that the Executive shall be required to
          travel from time to time in order to fulfill his duties to the
          Company.

2.   COMPENSATION AND RELATED MATTERS.

     (a)  Annual Base Salary. During the Term, the Executive shall receive a
          base salary at a rate of $335,000 per annum (the "Annual Base
          Salary"), which shall be paid in accordance with the customary payroll
          practices of the Company, subject to upward adjustment as may be
          determined by the Board in its discretion.

     (b)  Annual Bonus. During the Term, the Executive will be eligible to
          participate in an annual performance-based bonus plan established by
          the Board that provides an opportunity substantially the same as the
          bonus plan first adopted by the Board after the Effective Date.

     (c)  Restricted Stock Plan. During the Term, the Executive shall be
          entitled to participate in the equity plan (the "Restricted Stock
          Plan") of Parent pursuant to which, on the Effective Date, the
          Executive shall receive a number of shares of common stock of Parent
          equal to 1.2500% of the number of shares of common stock of Parent
          outstanding on the Effective Date, excluding shares issued under the
          Restricted Stock Plan. Restricted Stock shall vest as to 25% of the
          shares granted on the Effective Date and each of the first three
          anniversaries of the Effective Date, but only to the extent the
          Executive remains continuously employed by the Company through the
          applicable vesting date.

     (d)  Benefits. During the Term, the Executive shall be entitled to
          participate in group medical insurance, 401(k) and other standard
          benefits provided by the Company, as may be amended from time to time,
          which are applicable to the senior officers of the Company.


                                       2



     (e)  Vacation. During the Term, the Executive shall be entitled to four
          weeks paid vacation per calendar year and the maximum unused vacation
          time that the Executive may accrue is eight weeks. Any vacation shall
          be taken at the reasonable and mutual convenience of the Company and
          the Executive.

     (f)  Expenses. During the Term, the Company shall reimburse the Executive
          for all reasonable travel and other business expenses incurred by him
          in the performance of his duties to the Company in accordance with the
          Company's expense reimbursement policy.

     (g)  Key Person Insurance. At any time during the Term, the Company shall
          have the right to insure the life of the Executive for the Company's
          sole benefit. The Company shall have the right to determine the amount
          of insurance and the type of policy. The Executive shall cooperate
          with the Company in obtaining such insurance by submitting to physical
          examinations, by supplying all information reasonably required by any
          insurance carrier, and by executing all necessary documents reasonably
          required by any insurance carrier. The Executive shall incur no
          financial obligation by executing any required document, and shall
          have no interest in any such policy.

     (h)  Medical Examination. During the Term, the Company shall bear the
          expense of an annual medical examination of the Executive at the
          Coopers Clinic or another facility selected by the Executive and
          reasonably satisfactory to the Company.

     (i)  Annual Review. Approximately every 12 months during the Term, the
          Executive and the Company's Chief Executive Officer, Board or
          appropriate committee of the Board shall meet to discuss the
          Executive's performance and terms of the Executive's employment by the
          Company.

3.   TERMINATION.

     The Term and the Executive's employment hereunder may be terminated by the
Company or the Executive, as applicable, without any breach of this Agreement
only under the following circumstances:

     (a)  Circumstances.

          (i)  Death. The Term and the Executive's employment hereunder shall
               terminate upon his death.

          (ii) Disability. If the Executive has incurred a Disability, the
               Company may terminate the Term and the Executive's employment
               hereunder.

          (iii) Termination for Cause. The Company may terminate the Term and
               the Executive's employment hereunder for Cause.

          (iv) Termination without Cause. The Company may terminate the Term and
               the Executive's employment hereunder without Cause.


                                       3



          (v)  Resignation by the Executive. The Executive may resign his
               employment and terminate the Term for any reason.

          (vi) Non-extension of Term by the Company. The Company may give notice
               of non-extension to the Executive pursuant to Section 1(b).

          (vii) Non-extension of Term by the Executive. The Executive may give
               notice of non-extension to the Company pursuant to Section 1(b).

     (b)  Notice of Termination. Any termination of the Executive's employment
          by the Company or by the Executive under this Section 3 (other than
          termination pursuant to paragraph (a)(i)) shall be communicated by a
          written notice to the other party indicating the specific termination
          provision in this Agreement relied upon, and specifying a Date of
          Termination which, if submitted by the Executive, shall be at least
          two weeks following the date of such notice (a "Notice of
          Termination"). A Notice of Termination submitted by the Company may
          provide for a Date of Termination on the date the Executive receives
          the Notice of Termination, or any date thereafter elected by the
          Company in its sole discretion.

     (c)  Company obligations upon termination. Upon termination of the
          Executive's employment, the Executive (or the Executive's estate)
          shall be entitled to receive the sum of the Executive's Annual Base
          Salary through the Date of Termination not theretofore paid, any
          expenses owed to the Executive under Section 2(f), any accrued
          vacation pay owed to the Executive pursuant to Section 2(e), and any
          amount accrued and arising from the Executive's participation in, or
          benefits accrued under any employee benefit plans, programs or
          arrangements under Section 2(d), which amounts shall be payable in
          accordance with the terms and conditions of such employee benefit
          plans, programs or arrangements, and such other or additional benefits
          as may be, or become, due to him under the applicable terms of
          applicable plans, programs, agreements, corporate governance documents
          and other arrangements of the Company and its parent and subsidiaries
          (collectively, the "Company Arrangements").

4.   SEVERANCE PAYMENTS.

     (a)  Termination for Cause, Resignation by the Executive, Non-extension of
          Term by the Executive or the Company, death or Disability. If the
          Executive's employment is terminated pursuant to Section 3(a)(iii) for
          Cause, pursuant to Section 3(a)(v) for Resignation by the Executive,
          or pursuant to Section 3(a)(vii) due to non-extension of the Term by
          the Executive, the Executive shall not be entitled to any severance
          payment or benefits. If the Executive's employment is terminated
          pursuant to Section 3(a)(i) as a result of Executive's death or
          pursuant to Section 3(a)(ii) as a result of the Executive's
          Disability, the Company shall, subject to the Executive signing and
          not revoking, within sixty days following delivery to Executive, a
          separation and release agreement in the form attached hereto, (i) pay
          to the Executive an amount equal to the product of (x) the bonus that
          the Executive would have earned during the calendar year in which the
          Date


                                       4



          of Termination occurs, if any, and (y) a fraction, the numerator of
          which is the number of days that elapsed in such calendar year through
          the Date of Termination and the denominator of which is 365, payable
          when bonuses would have otherwise been payable had the Executive's
          employment not terminated and (ii) in the case of termination pursuant
          to Section 3(a)(ii) as a result of the Executive's Disability, pay to
          the Executive an amount equal to the excess, if any, of (x) the amount
          that would have been payable to the Executive pursuant to Section
          4(b)(i) if the Executive had been terminated by the Company without
          Cause pursuant to Section 3(a)(iv) over (y) the present value of the
          benefits to be received by the Executive (or his beneficiaries) under
          any disability plan sponsored by the Company or its affiliates (for
          purposes of this clause (ii) the amounts in (x) and (y) shall be
          determined by the Company on an after-tax basis to the extent that
          their receipt by the Executive (or his beneficiaries) would be subject
          to tax and on actuarial assumptions satisfactory to the Company). If
          the Executive's employment is terminated pursuant to Section 3(a)(vi)
          due to non-extension of the Term by the Company, the Company shall,
          subject to the Executive signing and not revoking, within sixty days
          following delivery to Executive, a separation and release agreement in
          the form attached hereto at Annex A, (i) pay to the Executive an
          amount equal to the product of (x) the bonus that the Executive would
          have earned during the calendar year in which the Date of Termination
          occurs, if any, and (y) a fraction, the numerator of which is the
          number of days that elapsed in such calendar year through the Date of
          Termination and the denominator of which is 365, payable when bonuses
          would have otherwise been payable had the Executive's employment not
          terminated and (ii) pay to the Executive, in a lump sum, an amount
          equal to the Annual Base Salary that the Executive would have been
          entitled to receive if the Executive had continued his employment
          hereunder for a period of 12 months following the Date of Termination.

     (b)  Termination without Cause. If the Executive's employment shall be
          terminated by the Company without Cause pursuant to Section 3(a)(iv)
          the Company shall, subject to the Executive signing and not revoking,
          within sixty days following delivery to Executive, a separation and
          release agreement in the form attached hereto:

          (i)  pay to the Executive, in a lump sum, an amount equal to the
               Annual Base Salary that the Executive would have been entitled to
               receive if the Executive had continued his employment hereunder
               for a period of 18 months following the Date of Termination;

          (ii) pay to the Executive an amount equal to the product of (x) the
               bonus that the Executive would have earned during the calendar
               year in which the Date of Termination occurs, if any, and (y) a
               fraction, the numerator of which is the number of days that
               elapsed in such calendar year through the Date of Termination and
               the denominator of which is 365, payable when bonuses would have
               otherwise been payable had the Executive's employment not
               terminated; and


                                       5



          (iii) cover the premium costs for medical benefits under COBRA for the
               Executive and, where applicable, his spouse and dependents, life
               insurance and disability insurance (all as in effect immediately
               prior to the Date of Termination) for a period of 12 months
               following the Date of Termination.

          If the Executive's employment shall be terminated by the Company
          without cause pursuant to Section 3(a)(iv), the Non-Competition
          Agreement dated December 27, 2005 between Parent and the Executive
          shall terminate on the earlier of the date it would have terminated
          without regard to this paragraph and a number of months after the Date
          of Termination equal to the number of months of Base Salary taken into
          account pursuant to Section 4(b)(i).

     (c)  Survival. The expiration or termination of the Term shall not impair
          the rights or obligations of any party hereto, which shall have
          accrued prior to such expiration or termination.

     (d)  409A. Notwithstanding anything to the contrary in this Section 4, no
          payments in this Section 4 will be paid during the six-month period
          following the Executive's termination of employment unless the Company
          determines, in its good faith judgment, that paying such amounts at
          the time or times indicated in this Section would not cause the
          Executive to incur an additional tax under Section 409A of the
          Internal Revenue Code of 1986, as amended (the "Code") (in which case
          such amounts shall be paid at the time or times indicated in this
          Section). If the payment of any amounts are delayed as a result of the
          previous sentence, on the first day following the end of the six-month
          period, the Company will pay the Executive a lump-sum amount equal to
          the cumulative amounts that would have otherwise been previously paid
          to the Executive under this Section 4. Thereafter, payments will
          resume in accordance with this Section.


5.   COMPETITION.

     (a)  The Executive shall not, at any time during the Term or during the
          two-year period following the Date of Termination, directly or
          indirectly engage in, have any equity interest in, or manage or
          operate any person, firm, corporation, partnership or business
          (whether as director, officer, employee, agent, representative,
          partner, security holder, consultant or otherwise) that engages in any
          business (x) which competes with any business of the Company anywhere
          in the States of California, Kansas, Missouri, Nevada or Texas, (y)
          which competes with any business of the Company in any State in which
          the Company operated a facility at any time (whether before or after
          the date of this Agreement) that the Executive was employed by the
          Company or (z) which derives $500,000,000 or more in annual
          consolidated revenues from the operation of skilled nursing facilities
          in the United States; provided, however, that the Executive shall be
          permitted to acquire a passive stock interest in such a business
          provided the stock acquired is publicly traded and is not more than
          five percent (5%) of the outstanding interest in such business.


                                       6



     (b)  The Executive shall not at any time during the Term or during the
          two-year period following the date of Termination, directly or
          indirectly, recruit or otherwise solicit or induce or encourage any
          employee, contractor, customer or supplier of the Company (i) to
          terminate its employment or arrangement with the Company, (ii) to
          otherwise change its relationship with the Company or (iii) to
          establish any relationship with the Executive or any other person,
          firm, corporation or other entity for any business purpose competitive
          with the business of the Company.

     (c)  In the event the terms of this Section 5 shall be determined by any
          court of competent jurisdiction to be unenforceable by reason of its
          extending for too great a period of time or over too great a
          geographical area or by reason of its being too extensive in any other
          respect, it will be interpreted to extend only over the maximum period
          of time for which it may be enforceable, over the maximum geographical
          area as to which it may be enforceable, or to the maximum extent in
          all other respects as to which it may be enforceable, all as
          determined by such court in such action.

     (d)  As used in this Section 5, the term "Company" shall include Parent,
          the Company and their respective direct or indirect subsidiaries.

     (e)  The Company acknowledges that, as of the Effective Date, the Executive
          owns (but does not operate) the out patient therapy and hospice
          facilities identified on Schedule 1 hereto. The Company agrees that
          such ownership interests shall not constitute a breach of Section 1(c)
          or this Section 5 by the Executive; provided that (1) the Executive
          does not acquire any additional ownership interests in out patient
          therapy and hospice facilities, (2) the Executive is not actively
          involved in the operation of any of such out patient therapy and
          hospice facilities, and (3) such ownership interests do not otherwise
          materially interfere with the Executive's duties to the Company
          hereunder.

6.   NONDISCLOSURE OF PROPRIETARY INFORMATION.

     (a)  Except in connection with the faithful performance of the Executive's
          duties hereunder or pursuant to Section 6(c), the Executive shall, in
          perpetuity, maintain in confidence and shall not directly, indirectly
          or otherwise, use, disseminate, disclose or publish, or use for his
          benefit or the benefit of any person, firm, corporation or other
          entity any confidential or proprietary information or trade secrets of
          or relating to the Company (including, without limitation,
          intellectual property in the form of patents, trademarks and
          copyrights and applications therefor, ideas, inventions, works,
          discoveries, improvements, information, documents, formulae,
          practices, processes, methods, developments, source code,
          modifications, technology, techniques, data, programs, other know-how
          or materials, owned, developed or possessed by the Company, whether in
          tangible or intangible form, information with respect to the Company's
          operations, processes, products, inventions, business practices,
          finances, principals, vendors, suppliers, customers, potential
          customers, marketing methods, costs, prices, contractual
          relationships, regulatory status, prospects and compensation paid to
          employees or


                                       7



          other terms of employment), or deliver to any person, firm,
          corporation or other entity any document, record, notebook, computer
          program or similar repository of or containing any such confidential
          or proprietary information or trade secrets. The parties hereby
          stipulate and agree that as between them the foregoing matters are
          important, material and confidential proprietary information and trade
          secrets and affect the successful conduct of the businesses of the
          Company (and any successor or assignee of the Company). Confidential
          Information shall not include any information which has entered the
          public domain through no fault of the Executive.

     (b)  Upon termination of the Executive's employment with the Company for
          any reason, the Executive will promptly deliver to the Company all
          correspondence, drawings, manuals, letters, notes, notebooks, reports,
          programs, plans, proposals, financial documents, or any other
          documents concerning the Company's customers, business plans,
          marketing strategies, products or processes.

     (c)  The Executive may respond to a lawful and valid subpoena or other
          legal process but shall give the Company the earliest possible notice
          thereof, shall, as much in advance of the return date as possible,
          make available to the Company and its counsel the documents and other
          information sought and shall assist such counsel at Company's expense
          in resisting or otherwise responding to such process.

     (d)  As used in this Section 6 and Section 7, the term "Company" shall
          include the Company and its direct or indirect parents, if any, and
          subsidiaries.

     (e)  Nothing in this Agreement shall prohibit the Executive from (i)
          disclosing information and documents when required by law, subpoena or
          court order (subject to the requirements of Section 6(c) above), (ii)
          disclosing information and documents to his attorney or tax adviser on
          a confidential basis for the purpose of securing legal or tax advice,
          (iii) disclosing the post-employment restrictions in this Agreement in
          confidence to any potential new employer, or (iv) retaining, at any
          time, his personal correspondence, his personal rolodex and documents
          related to his own personal benefits, entitlements and obligations.

7.   INVENTIONS.

     All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that the Executive may discover, invent or
originate during the Term, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company ("Inventions"),
shall be the exclusive property of the Company. The Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Executive hereby
appoints the Company as his


                                       8



attorney-in-fact to execute on his behalf any assignments or other documents
reasonably deemed necessary by the Company to protect or perfect its rights to
any Inventions.

8.   INJUNCTIVE RELIEF.

     It is recognized and acknowledged by the Executive that a breach of the
covenants contained in Sections 5, 6 and 7 will cause irreparable damage to
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Sections 5, 6 and 7, in addition to any
other remedy which may be available at law or in equity, the Company will be
entitled to specific performance and temporary, preliminary and permanent
injunctive relief.

9.   ASSIGNMENT AND SUCCESSORS.

     The Company may assign its rights and obligations under this Agreement to
any successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise), and may assign or encumber this Agreement and
its rights hereunder as security for indebtedness of the Company and its
affiliates. This Agreement shall be binding upon and inure to the benefit of the
Company, the Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees,
and legatees, as applicable. None of the Executive's rights or obligations may
be assigned or transferred by the Executive, other than the Executive's rights
to payments hereunder, which may be transferred only by will or operation of
law. Notwithstanding the foregoing, the Executive shall be entitled, to the
extent permitted under applicable law and applicable Company Arrangements, to
select and change a beneficiary or beneficiaries to receive compensation
hereunder following his death by giving written notice thereof to the Company.

10.  CERTAIN DEFINITIONS.

     (a)  Cause. The Company shall have "Cause" to terminate the Term and the
          Executive's employment hereunder upon:

          (i)  the Executive's failure to perform substantially his duties as an
               employee of the Company (other than any such failure resulting
               from the Executive's incapacity due to physical or mental
               illness), which is not cured within 15 days after a written
               demand for performance is given to the Executive by the Board
               specifying in reasonable detail the manner in which the Executive
               has failed to perform substantially his duties as an employee of
               the Company;

          (ii) the Executive's failure to carry out, or comply with, in any
               material respect any lawful and reasonable directive of the Board
               consistent with the terms of this Agreement that, if capable of
               cure, is not cured by the Executive within 15 days after written
               notice given to the Executive describing such failure in
               reasonable detail;


                                       9



          (iii) the Executive's conviction, plea of no contest, plea of nolo
               contendere, or imposition of unadjudicated probation for any
               felony or, to the extent involving fraud, dishonesty, theft,
               embezzlement or moral turpitude, any other crime;

          (iv) the Executive's violation of a material regulatory requirement
               relating to the business of the Company and its subsidiaries
               that, in the good faith judgment of the Board, is injurious to
               the Company in any material respect;

          (v)  the Executive's unlawful use (including being under the
               influence) or possession of illegal drugs on the Company's
               premises or while performing the Executive's duties and
               responsibilities under this Agreement;

          (vi) the Executive's breach of this Agreement in any material respect
               that, if capable of cure, is not cured by the Executive within 15
               days after written notice given to the Executive describing such
               breach in reasonable detail; or

          (vii) the Executive's commission of an act of fraud, embezzlement,
               misappropriation, willful misconduct, gross negligence or breach
               of fiduciary duty with respect to the Company or any of its
               affiliates;

     (b)  Date of Termination. "Date of Termination" shall mean (i) if the
          Executive's employment is terminated by his death, the date of his
          death; (ii) if the Executive's employment is terminated pursuant to
          Section 3(a)(ii)-(v) either the date indicated in the Notice of
          Termination or the date specified by the Company pursuant to Section
          3(b), whichever is earlier; (iii) if the Executive's employment is
          terminated pursuant to Section 3(a)(vi) or Section 3(a)(vii), the
          expiration of the then-applicable Term.

     (c)  Disability. "Disability" shall mean, at any time the Company or any of
          its affiliates sponsors a long-term disability plan for the Company's
          employees in which the Executive participates, "disability" as defined
          in such long-term disability plan for the purpose of determining a
          participant's eligibility for benefits, provided, however, if the
          long-term disability plan contains multiple definitions of disability,
          "Disability" shall refer that definition of disability which, if the
          Executive qualified for such disability benefits, would provide
          coverage for the longest period of time. The determination of whether
          the Executive has a Disability shall be made by the person or persons
          required to make disability determinations under the long-term
          disability plan. At any time the Company does not sponsor a long-term
          disability plan for its employees in which the Executive participates,
          Disability shall mean the Executive's inability to perform, with or
          without reasonable accommodation, the essential functions of his
          position hereunder for a total of six months during any 12-month
          period as a result of incapacity due to mental or physical illness as
          determined by a physician selected


                                       10



          by the Board and acceptable to the Executive or the Executive's legal
          representative, such agreement as to acceptability not to be
          unreasonably withheld or delayed. Any refusal by the Executive to
          submit to a medical examination for the purpose of determining
          Disability shall be deemed to constitute conclusive evidence of the
          Executive's Disability.

11.  GOVERNING LAW.

     This Agreement shall be governed, construed, interpreted and enforced in
accordance with its express terms, and otherwise in accordance with the
substantive laws of the State of California, without reference to the principles
of conflicts of law, and where applicable, the federal laws of the United
States.

12.  VALIDITY.

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13.  NOTICES.

     Any notice, request, claim, demand, document and other communication
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by facsimile or
certified or registered mail, postage prepaid, or any nationally recognized
overnight courier service with signature certification of receipt, as follows:

     (a)  If to the Company:

          Skilled Healthcare Group, Inc.
          27442 Portola Parkway
          Suite 200
          Foothill Ranch, California 92610
          Attn: General Counsel

          with copies to:

          Onex Partners LP
          712 Fifth Avenue
          New York, New York 10019
          Facsimile: (212) 582-0909
          Attention: Robert M. LeBlanc


                                       11



          and:

          Kaye Scholer LLP
          425 Park Avenue
          New York, New York 10022
          Facsimile: (212) 836-8211
          Attention:  Joel I. Greenberg

     (b)  If to the Executive:

          Mark Wortley

          [_________________________]
          [_________________________]
          Facsimile: [_____________]

     or at any other address as any party shall have specified by notice in
writing to the other party.

14.  COUNTERPARTS.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement. Signatures delivered by facsimile shall be deemed effective
for all purposes.

15.  ENTIRE AGREEMENT.

     The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive by
the Company and supersede all prior understandings and agreements, whether
written or oral. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other
legal proceeding to vary the terms of this Agreement.

16.  AMENDMENTS; WAIVERS.

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by the Executive and a duly authorized officer of
Company. By an instrument in writing similarly executed, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties with any specifically identified provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity. Except as otherwise set forth in this Agreement, the respective rights
and obligations of the parties under this Agreement shall survive any
termination of Executive's employment.


                                       12



17.  NO INCONSISTENT ACTIONS.

     The parties hereto shall not voluntarily undertake or fail to undertake any
action or course of action inconsistent with the provisions or essential intent
of this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.

18.  CONSTRUCTION.

     This Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair meaning. Any
presumption or principle that the language is to be construed against any party
shall not apply. The headings in this Agreement are only for convenience and are
not intended to affect construction or interpretation. Any references to
paragraphs, subparagraphs, sections or subsections are to those parts of this
Agreement, unless the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural; (b) "and" and "or" are each used
both conjunctively and disjunctively; (c) "any," "all," "each," or "every" means
"any and all," and "each and every"; (d) "includes" and "including" are each
"without limitation"; (e) "herein," "hereof," "hereunder" and other similar
compounds of the word "here" refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (f) all pronouns
and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the entities or persons referred
to may require.

19.  ARBITRATION.

     Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of the Executive's employment by the Company, including,
but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in Los Angeles County, California, before a sole neutral arbitrator
(the "Arbitrator"), mutually selected and agreeable to both parties and selected
from Judicial Arbitration and Mediation Services, Inc., Los Angeles County,
California, or its successor ("JAMS"), or if JAMS is no longer able to supply
the Arbitrator, such Arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of
California Code of Civil Procedure Sections 1280 et seq. as the exclusive forum
for the resolution of such dispute; provided, however, that provisional
injunctive relief (including, but not limited to, temporary restraining orders
and preliminary injunctions) may, but need not, be sought by either party to
this Amended Agreement in any court of competent jurisdiction while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator; no bond or other security shall be required in connection therewith.

     Final resolution of any dispute through arbitration may include any remedy
or relief that the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of
the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator's award


                                       13



or decision is based. Any award or relief granted by the Arbitrator hereunder
shall be final and binding on the parties hereto and may be enforced by any
court of competent jurisdiction.

     The parties acknowledge and agree that they are hereby waiving any rights
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising
out of or in any way connected with this Amended Agreement or the services
rendered hereunder. The parties agree that the Company Shall be responsible for
payment of the forum costs of any arbitration hereunder, including the
Arbitrator's fee. The Executive and the Company further agree that in any
proceeding to enforce the terms of this Amended Agreement, the prevailing party
shall be entitled to its or her reasonable attorneys' fees and costs (other than
forum costs associated with the arbitration) incurred by it or him in connection
with resolution of the dispute up to a maximum of Fifty Thousand Dollars
($50,000.00) in addition to any other relief granted.

20.  ENFORCEMENT.

     If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, such provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21.  WITHHOLDING.

     The Company shall be entitled to withhold from any amounts payable under
this Agreement any federal, state, local or foreign withholding or other taxes
or charges which the Company is required to withhold. The Company shall be
entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise.

22.  INDEMNIFICATION.

     The Company agrees that (a) if the Executive is made a party, or is
threatened to be made a party, to any threatened or actual action, suit or
proceeding whether civil, criminal, administrative, investigative, appellate or
other (a "Proceeding") by reason of the fact that he is or was a director,
officer, employee, agent, manager, consultant or representative of the Company
or (b) if any claim, demand, request, investigation, controversy, threat,
discovery request or request for testimony or information (a "Claim") is made,
or threatened to be made, that arises out of or relates to the Executive's
service in any of the foregoing capacities, then the Executive shall promptly be
indemnified and held harmless by the Company to the fullest extent permitted by
the laws of the state of incorporation of the Company, against any and all
costs, expenses, liabilities and losses incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, member, employee, agent,
manager, consultant or representative of the Company and shall inure


                                       14



to the benefit of the Executive's heirs, executors and administrators. The
Company may assume the defense of any Proceeding or Claim with counsel selected
by the Company and reasonably satisfactory to the Executive and, if it does so,
the Executive shall not be entitled to be reimbursed for any separate counsel he
may retain in connection with such Proceeding or Claim.

     Neither the failure of the Company (including its Board, independent legal
counsel or stockholders) to have made a determination in connection with any
request for indemnification that the Executive has satisfied any applicable
standard of conduct, nor a determination by the Company (including its Board,
independent legal counsel or stockholders) that the Executive has not met any
applicable standard of conduct, shall create a presumption that the Executive
has not met an applicable standard of conduct.

     During the period of Employment and for a period of time thereafter
determined as provided below, the Company shall keep in place a directors and
officers' liability insurance policy (or policies) providing coverage, or such
coverage may be provided under a policy that provides coverage to Onex
Corporation or Onex Partners LP and their affiliates, to the Executive if and to
the extent that the Company provides such coverage to its directors and such
coverage (or other directors and officers liability insurance coverage) shall
continue after the termination of the Period of Employment if and for the period
of time that such coverage is extended to the Company's former director, other
than former directors who are employees of Onex Corporation, Onex Partners LP or
their affiliates.

23.  COOPERATION IN LITIGATION.

     The Executive promises and agrees that, following the date his employment
by the Company terminates, he will reasonably cooperate with the Company in any
litigation in which the Company is a party or otherwise involved which arises
out of events occurring prior to the termination of his employment, including
but not limited to, serving as a consultant (at a reasonable hourly rate) or
witness and producing documents and information relevant to the case or helpful
to the Company.

24.  EMPLOYEE ACKNOWLEDGEMENT.

     The Executive acknowledges that he has read and understands this Agreement,
is fully aware of its legal effect, has not acted in reliance upon any
representations or promises made by the Company other than those contained in
writing herein, and has entered into this Agreement freely based on his own
judgment.


                                       15



     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.

                                        SKILLED HEALTHCARE GROUP, INC.


                                        By:
                                            ------------------------------------
                                        Name: Boyd W. Hendrickson
                                        Title: Chief Executive Officer


                                        EXECUTIVE


                                        By:
                                            ------------------------------------
                                        Name: Mark Wortley

                      [SIGNATURE PAGE -- EMPLOYMENT AGREEMENT]



                                   SCHEDULE 1

1.   Alta Holding Inc., limited to Hospice and Out Patient Physical Therapy
     clinics in Arkansas and Missouri.




                                     ANNEX A

EX-10.9

                                                                    Exhibit 10.9

                             TRIGGER EVENT CASH BONUS AGREEMENT

      THIS TRIGGER EVENT CASH BONUS AGREEMENT (the "Agreement"), is made by and
between Skilled Healthcare Group Inc., a Delaware corporation (the "Company"),
and John E. King ("Executive"), effective as of April 30, 2005, and is made part
of that certain Employment Agreement between Executive and the Company (the
"Employment Agreement").

                                   ARTICLE I.
                                  DEFINITIONS

      Whenever the following terms are used in this Agreement they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

      Section 1.1 "Affiliated Entities" shall mean Skilled Healthcare LLC and
any entity that is controlled by and consolidated with in the financial
statements of either the Company or Skilled Healthcare LLC.


      Section 1.2 "Applicable Conversion Ratio" is the Conversion Ratio that is
tied to the specific Terminal Equity Value and is used to determine the Then
Effective Ownership Percentage. The Conversion Ratios as they relate to the
varying Terminal Equity Values are set forth on Schedule A hereof.

      Section 1.3 "Asset Sale" shall mean the date of closing for the sale of
all or substantially all of the assets of the Company and its Affiliated
Entities.

      Section 1.4 "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.

      Section 1.5 "Cash Bonus" shall have the meaning ascribed to it in Section
2.1 hereof.

      Section 1.6 "Cause" shall have the mean ascribed to it in the Employment
Agreement.

      Section 1.7 "Credit Facilities" shall have the meaning ascribed to it in
Section 2.5 hereof.

      Section 1.8 "Disability" shall have the meaning ascribed to it in the
Employment Agreement.

      Section 1.9 "Maximum Bonus Equivalent" for Executive, shall mean 13,329.
Maximum Bonus Equivalent is intended to generally represent the number of shares
of Common Stock or its equivalents that Executive would have been granted to
obtain the equivalent value of the maximum Cash Bonus for a Trigger Event. For
purposes of the calculation of Total Shares




of Common Stock Outstanding, Executive's Maximum Bonus Equivalent, plus all
other Maximum Bonus Equivalents granted to other employees of the Company shall
be included.

      Section 1.10 "IPO" shall mean the date that the closing of a public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Company to the public occurs and the Common Stock becomes listed
or quoted on a national security exchange or in the NASDAQ National Market
Quotation System.

      Section 1.11 "Period of Employment" shall mean October 1, 2004 through and
including October 1, 2009.

      Section 1.12 "Qualifying Termination of Service" shall mean termination of
Executive's employment with the Company and its Affiliated Entities by reason of
Executive's death or Disability or any termination of Executive by the Company
without Cause. In addition to the termination of Executive by the Company
without Cause, as defined in Section 1.6, Executive shall be deemed to have been
terminated by the Company without Cause if Executive resigns from the Company
during the Period of Employment under circumstances defined under Section 5.4 of
the Employment Agreement. The Board, in its reasonable good faith discretion,
shall determine the effect of all matters and questions relating to a
Termination of Service, including without limitation whether a Termination of
Service is a Qualifying Termination of Service. In the event that the Executive
disagrees with such Board's determination, then such matter shall be resolved
pursuant to Section 21 of the Employment Agreement.

      Section 1.13 "Stock Sale" shall mean the date as of which at least a
majority of the Company's then outstanding common stock is sold in a single
transaction or series of substantially related transactions and, unless
otherwise approved by the Board, the consideration paid is cash or marketable
securities.

      Section 1.14 "Termination of Service" shall mean termination of
Executive's employment with the Company and its Affiliated Entities for any
reason. The Board, in its discretion, shall determine the effect of all matters
and questions relating to a Termination of Service, including, without
limitation, whether a Qualifying Termination of Service has occurred.

      Section 1.15 "Terminal Equity Value" shall mean: (i) in the case of an
IPO, the equity value of the Company's outstanding common stock determined based
on the public offering price of the Company's common stock in the IPO and the
number of shares of common stock outstanding immediately prior to the IPO; (ii)
in the case of a Stock Sale, the equity value of the Company's outstanding
common stock determined based on the net proceeds distributable in respect of
the common stock of the Company that is sold in the Stock Sale and the number of
shares of common stock outstanding; and (iii) in the case of an Asset Sale, the
aggregate net proceeds that are or would be distributable in respect of all
outstanding common stock of the Company assuming that the Company paid off its
debt and preferred stock and debt securities, and liquidated on the Asset Sale,
and assuming that any right, warrant or option to acquire any common stock of
the Company entitled to be exercised is converted immediately prior to the
distribution.


                                       2


      Section 1.16 "Then Effective Ownership Percentage" shall have the meaning
and shall be determined as set forth in Section 3.1 and 3.2, and Schedule A
hereof. The Then Effective Ownership Percentage varies with the Terminal Equity
Value and the Total Shares of Common Stock Outstanding. The maximum Then
Effective Ownership Percentage is 1% for a Terminal Equity Value of $375 million
or more.

      Section 1.17 "Total Shares of Common Stock Outstanding" shall mean the
total number of shares of Class A Common Stock outstanding immediately prior to
the Trigger Event and without giving effect to the Trigger Event, including (i)
all shares of Class A Common Stock issuable upon exercise or conversion of any
then outstanding options, warrants and Class B Common Stock, plus (ii) the
aggregate Maximum Bonus Equivalents of all employees, including Executive.

      Section 1.18 "Trigger Event" shall mean any of (i) an Asset Sale, (ii) an
IPO, or (iii) a Stock Sale, in each case with a Terminal Equity Value equal to
$175 million or more.

      Section 1.19 "Vested Bonus Equivalent" shall have the meaning ascribe to
it in Section 3.2 hereof.

                                  ARTICLE II.
                    CASH BONUS PAYABLE UPON A TRIGGER EVENT

      Section 2.1 Cash Bonus

      Subject to Sections 2.2, 2.3 and 2.4, on the date of the closing of a
Trigger Event, the Company shall pay to Executive a cash bonus ("Cash Bonus")
equal to the product of (a) the sum of the Terminal Equity Value of the Company,
plus the aggregate cash dividends paid by the Company on shares of its common
stock prior to the Trigger Event, multiplied by (b) Executive's Then Effective
Ownership Percentage (as determined pursuant to Section 3.1 or 3.2, as
applicable). For purposes of determining the Cash Bonus, Executive's Then
Effective Ownership Percentage is prorated between the Terminal Equity Values.

      Executive understands and agrees that issuances by the Company after April
30, 2005 of shares, options, warrants or other rights to acquire shares of Class
A Common Stock or any Bonus Equivalents will reduce Executive's Then Effective
Ownership Percentage and thus likely will result in a reduction in any Cash
Bonus payable.

      Section 2.2 Escrow/Holdback

      In the event any part or all of the consideration payable to the Company
or its stockholders in connection with a Trigger Event is paid into escrow or
subject to holdback provisions, a portion or all of the Cash Bonus payable to
Executive shall similarly be subject to such escrow or holdback provisions, in
the same percentage as the escrowed amount relates to such total consideration.
Thus, if 2% of the consideration payable to the Company (or its stockholders) in
the Trigger Event is placed in escrow, then 2% of the Cash Bonus shall be placed
the Company into escrow; the portion of the Cash Bonus so escrowed shall be paid
to Executive only if and to the extent the escrowed or withheld Trigger Event
consideration is


                                       3


released and paid to the Company (or its stockholders, as applicable). The terms
of any Trigger Event escrow or holdback provisions shall govern the terms of the
Company's right to withhold a portion of the Cash Bonus provided hereby.

      Section 2.3 No Cash Bonus

      (a) Termination of Employment or Employment Period. In the event prior to
the Trigger Event there is a Termination of Service that is not a Qualifying
Termination of Service, no Cash Bonus will be paid or payable to Executive, and
this agreement shall cease to be of any further force or effect. In the event
the Period of Employment expires prior to the Trigger Event, no Cash Bonus will
be paid or payable to Executive, and this agreement shall cease to be of any
further force or effect. Thus, if Executive resigns, is terminated for Cause or
the Period of Employment terminates and is not extended, prior to a Trigger
Event, then no Cash Bonus or other form of consideration shall be paid. In the
event of a Qualifying Termination of Service, no Cash Bonus will be paid or
payable unless, until and only to the extent a Trigger Event occurs.

      (b) Stock Sale, IPO or Asset Sale with a Terminal Equity Value less than
$175 million. In the event of a Stock Sale, IPO or Asset Sale with a Terminal
Equity Value of less than $175 million, no Cash Bonus will be paid or payable to
Executive, and this agreement shall cease to be of any further force or effect.

      Section 2.4 Insufficient Funds

      In the event the Company does not have sufficient funds to pay the Cash
Bonus or such payment would violate any of the provisions of any of the
Company's existing or future credit facilities or indentures (collectively, the
"Credit Facilities") then in effect, or the rights and preferences of preferred
stock then outstanding, or any applicable law, then to the extent necessary to
comply with the Credit Facilities, the preferred stock or applicable law, the
Company shall make periodic payments toward the obligation herein to the maximum
allowable under such restrictions up the amount of the obligation plus interest
charges on amounts paid more than 45 days after the Trigger Event, but in no
event in amounts less than a comparable amount paid pari-passu with any equity
payment made pursuant to a Trigger Event. Interest charges applicable herein
shall be on the unpaid balance of the obligation at the then-current Applicable
Federal Rate.

                                  ARTICLE III.
            DETERMINATION OF THEN EFFECTIVE OWNERSHIP PERCENTAGE AND
                              TERMINAL EQUITY VALUE

      Section 3.1 Trigger Event During Period of Employment.

      In the event of a Trigger Event during the Period of Employment,
Executive's Then Effective Ownership Percentage shall equal the product of:

      o     the quotient of (x) Executive's Maximum Bonus Equivalent divided by
            (Y) the Total Shares of Common Stock Outstanding;


                                       4


      o     multiplied by, the Applicable Conversion Ratio for the Terminal
            Equity Value for such Trigger Event.

The Bonus Payments based on Terminal Equity Values and Then Effective Ownership
Percentages as of April 30, 2005 are set forth on Schedule A attached hereto.

      Section 3.2 Trigger Event following a Qualifying Termination of Service.

      In the event of a Trigger Event following a Qualifying Termination of
Service, Executive's Then Effective Ownership Percentage shall equal the product
of:

      o     the quotient of (x) the Vested Bonus Equivalent divided by (Y) the
            Total Shares of Common Stock Outstanding;

      o     multiplied by. the Applicable Conversion Ratio for the Terminal
            Equity Value.

For purposes of this Section 3.2, " Vested Bonus Equivalent" means 5,278 as of
April 30, 2005, plus an additional 278 credited on the last day of each full
calendar month (except for the last calendar month, which credit shall be for
267) elapsed from April 30, 2005 and ending with and including the earlier of
(i) last full calendar month prior to the month in which the Qualifying
Termination of Service occurs or (ii) September 30, 2007. In no event, however,
shall the Vested Bonus Equivalent exceed the Maximum Bonus Equivalent {i.e.,
13,329).

For purposes of this Section 3.2, the Terminal Equity Value shall be determined
as of the date of the Qualifying Termination of Service. If a Trigger Event
occurs within nine months following the Qualifying Termination of Service,
however, the Terminal Equity Value as of the Trigger Event (and not the Terminal
Equity Value as of the Qualifying Termination of Service) shall be used to
determine the Applicable Conversion Ratio.

      Section 3.3 Determination of Terminal Equity Value

      The Board shall determine the Terminal Equity Value, and for purposes of
an a Asset Sale, the Board shall assume that the Company is a willing seller and
sold its assets to a willing purchaser. The Terminal Equity Value shall be
determined as of the Trigger Event, except in the case of a Qualifying
Termination of Service, in which case the Terminal Equity Value shall be
determined as of the date of the Qualifying Termination of Service. If a Trigger
Event occurs within nine months following the Qualifying Termination of Service,
however, the Terminal Equity Value as of the Trigger Event (and not the Terminal
Equity Value as of the Qualifying Termination of Service) shall be used to
determine the Cash Bonus. The Board shall provide prompt written notice to
Executive of such valuation.

      If Executive disagrees with such valuation by the Board, Executive may, by
written notice to the Board no later than 10 days after Executive is notified of
the Board's determination of Terminal Equity Value, elect to have a nationally
recognized valuation firm conduct a separate determination of such Terminal
Equity Value. Any valuation firm selected must complete its determination within
75 days of its engagement and must base its


                                       5


determination upon the applicable factor(s) identified in the definition of
Terminal Equity Value. Executive shall initially select a nationally recognized
valuation firm to conduct the determination. The Company must approve or deny
the valuation firm selected by Executive within 15 business days, which approval
shall not be unreasonably withheld. If the Company denies Executive's proposed
valuation firm, Executive can select an alternate firm and the Company will have
10 business days to reasonably approve or deny such selection. If the Company
denies Executive's second proposed valuation firm, Executive can select a third
firm and the Company will have 5 business days to reasonably approve or deny
such selection provided, however, that if the Company denies 3 nationally
recognized valuation firms selected by Executive, Executive can require the
Company to choose one of the 3 nominated firms within 5 business days, and if
the Company does not select a firm Executive may select one of such firms. The
Company shall be deemed to have approved any selection by Executive if it does
not provide an approve or deny response within the specified time period.

      Following the determination of Terminal Equity Value by the valuation
firm, the Company and Executive will have a 3 week period to mutually agree that
the Terminal Equity Value will be the average or some other permutation of the
Board's determination and the valuation firm's determination. If the Company and
Executive do not agree to a Terminal Equity Value based on those two
determinations within 3 weeks, the valuation firm and the Company will choose a
second nationally recognized valuation firm by each proposing 3 candidates to
the Company and Executive simultaneously within two weeks, and any candidate
appearing on both lists will be selected (if more than one candidate appears on
both lists the final selection will be determined by chance (i.e., flipping a
coin)). If no candidate appears on both lists, the process will be repeated
until a common candidate is found or the Company, in its sole discretion, can
select any firm previously submitted by Executive. The second valuation firm
will have 75 days to complete its determination of Terminal Equity Value (and if
not completed the average of the Company's and the fast valuation firm's
determinations will be used). After the second valuation firm completes its
determination, the Terminal Equity Value used will be the average of the two
determinations that are closest in value from among the three determinations
(the Board's, the first valuation firm's, and the second valuation firm's).

      The Company will pay the costs of the first valuation firm, except that
the Company shall be entitled to reimbursement from Executive for such costs if
the first valuation firm's valuation is within 5 % of the Board's valuation. The
Company and Executive will equally share the costs of the

 second valuation firm, if needed. If the Company is entitled to reimbursement
 from Executive for any costs in accordance with the preceding two sentences,
 the Company may offset all or a portion of the amount owing to the Company by
 Executive against any amount (including, without limitation, any amount of
 compensation) otherwise payable to Executive. The Company and Executive shall
 be bound by the final determination of Terminal Equity Value pursuant to this
 Section 3.3.


                                       6


      Section 3.4 Revisions to Applicable Conversion Ratios and Terminal Equity
Value Thresholds

      The Company and Executive shall negotiate in good faith revisions to the
Applicable Conversion Ratios and the Terminal Equity Value thresholds, as
applicable, in the event of any acquisitions, dispositions, combinations,
mergers, consolidation, reorganization or similar corporate transaction that is
reasonably expected to materially affect the Terminal Equity Value of the
Company.

                                  ARTICLE IV.
                                 MISCELLANEOUS

      Section 4.1 Administration

      The Board shall have the power to interpret this Agreement and to adopt
such rules for the interpretation and application of this Agreement as are
consistent herewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Board in
good faith, shall be made consistent with those made or applicable to the
Company's other senior management shareholders, and shall be final and binding
upon Executive, the Company and all other interested persons. No member of the
Board shall be personally liable for any action, determination, or
interpretation made in good faith.

      Section 4.2 Notices

      Any notice or other communication given pursuant to this Agreement shall
be in writing and shall be personally delivered, sent by overnight courier or
express mail, or mailed by first class certified or registered mail, postage
prepaid, return receipt requested as follows:

      (a)   if to the Company:

      Skilled Healthcare Group, Inc.
      Attention: Board of Directors
      27442 Portola Parkway,
      Suite 200
      Foothill Ranch, California 92610

      With copy to:

      Heritage Partners, Inc.
      30 Rowes Wharf, Suite 300
      Boston, MA 02110
      Attn: Mark J. Jrolf


                                       7


      (b)   if to Executive:

      Mr. John E. King
      25362 Gallup Circle
      Laguna Hills, CA 92623

      Either party may change its address set forth above by written notice
given to the other party in accordance with the foregoing. Any notice shall be
effective when personally delivered, 2 business days after being delivered to
overnight courier or express mail, or 5 business days after by first class
certified or registered mail, postage prepaid, return receipt requested.

      Section 4.3 Titles

      Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

      Section 4.4 Governing Law

      This Agreement and the legal relations hereby created between the parties
hereto shall be governed by and construed under and in accordance with the laws
of the State of California, without regard to choice of law provisions thereof.

      Section 4.5 Amendments

      No amendment or waiver of this Agreement or any term, covenant, or
condition hereof shall be binding upon the party against whom enforcement of
such amendment or waiver is sought unless it is made in writing and signed by or
on behalf of such party. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.

      Section 4.6 Assignment

      This Agreement is personal in its nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder; provided, however, that, in the event of a
merger, consolidation, or transfer or sale of all or substantially all of the
assets or stock of the Company with or to any other individual(s) or entity,
this Agreement shall be binding upon and inure to the benefit of such successor
and such successor shall discharge and perform all the promises, covenants,
duties, and obligations of the Company hereunder.


                                       8


      IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of May_____________, 2005.

                                        SKILLED HEALTHCARE GROUP, INC.
                                        a Delaware corporation



                                        By   /s/ BOYD HENDRICKSON
                                          --------------------------------------
                                             Boyd Hendrickson
                                             Chief Executive Officer

EXECUTIVE


/s/JOHN E. KING
- --------------------------------------




                                   SCHEDULE A



                                                                      BONUS
                                                                 PAYMENT BASED ON
                                             THEN EFFECTIVE        THEN EFFECTIVE
                            APPLICABLE         OWNERSHIP             OWNERSHIP
                            CONVERSION      PERCENTAGE AS OF      PERCENTAGE AS OF
 TERMINAL EQUITY VALUE        RATIO             4/30/05               4/30/05
 ---------------------      ----------      ----------------     -----------------
                                                       
      $175,000,000            0.250              0.250%              $437,500
      $200,000,000            0.344              0.344%              $688,000
      $225,000,000            0.438              0.438%              $985,500
      $250,000,000            0.531              0.531%            $1,327,500
      $275,000,000            0.625              0.625%            $1,718,750
      $300,000,000            0.719              0.719%            $2,157,000
      $325,000,000            0.813              0.813%            $2,642,250
      $350,000,000            0.906              0.906%            $3,171,000
      $375,000,000            1.000              1.000%            $3,750,000


Then Effective Ownership Percentage is prorated between the Terminal Equity
Values.

The Terminal Equity Value shall be determined as of the Trigger Event, except in
the case of a Qualifying Termination of Service, in which case the Terminal
Equity Value shall be determined as of the date of the Qualifying Termination of
Service. If a Trigger Event occurs within nine months following the Qualifying
Termination of Service, however, the Terminal Equity Value as of the Trigger
Event (and not the Terminal Equity Value as of the Qualifying Termination of
Service) shall be used to determine the Cash Bonus.

Then Effective Ownership Percentage as of 4/30/05 is based on 1,332,938 Total
Shares of Common Stock Outstanding, which includes 1,193,587 shares of Class A
Common Stock, an aggregate of 17,768 Maximum Bonus Equivalents of Executive and
Mr. Wortley, 65,731 shares of Class B Common Stock held by Messrs. Hendrickson,
Lynch and Rapp, 5,475 employee options and 50,377 warrants. The Then Effective
Ownership Percentage and Bonus Payment will decrease in accordance with the
terms of this agreement in the event of the issuance of any shares of Class A
Common Stock, or any rights to acquire Class A Common Stock, or any Bonus
Equivalents.

EX-10.10

                                                                   Exhibit 10.10

                       TRIGGER EVENT CASH BONUS AGREEMENT
                       ----------------------------------

      THIS TRIGGER EVENT CASH BONUS AGREEMENT (the "Agreement"), is made by and
between Skilled Healthcare Group Inc., a Delaware corporation (the "Company"),
and Mark Wortley ("Executive"), effective as of April 30, 2005, and is made part
of that certain Amended and Restated Employment Agreement between Executive and
Hallmark Rehabilitation GP, LLC, a Delaware limited liability company and
subsidiary of the Company, dated March 8, 2004 (the "Employment Agreement").

                                   ARTICLE I.
                                  DEFINITIONS
                                  -----------

      Whenever the following terms are used in this Agreement they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

      Section 1.1 "Affiliated Entities" shall mean Skilled Healthcare LLC and
any entity that is controlled by and consolidated with in the financial
statements of either the Company or Skilled Healthcare LLC.

      Section 1.2 "Applicable Conversion Ratio" is the Conversion Ratio that is
tied to the specific Terminal Equity Value and is used to determine the Then
Effective Ownership Percentage. The Conversion Ratios as they relate to the
varying Terminal Equity Values are set forth on Schedule A hereof.

      Section 1.3 "Asset Sale" shall mean the date of closing for the sale of
all or substantially all of the assets of the Company and its Affiliated
Entities.

      Section 1.4 "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.

      Section 1.5 "Cash Bonus" shall have the meaning ascribed to it in Section
2.1 hereof.

      Section 1.6 "Cause" shall have the mean ascribed to it in the Employment
Agreement.

      Section 1.7 "Credit Facilities" shall have the meaning ascribed to it in
Section 2.5 hereof.

      Section 1.8 "Disability" shall have the meaning ascribed to it in the
Employment Agreement.

      Section 1.9 "Maximum Bonus Equivalent" for Executive, shall mean 4,439.
Maximum Bonus Equivalent is intended to generally represent the number of shares
of Common Stock or its equivalents that Executive would have been granted to
obtain the equivalent value of

the maximum Cash Bonus for a Trigger Event. For purposes of the calculation of
Total Shares of Common Stock Outstanding, Executive's Maximum Bonus Equivalent,
plus all other Maximum Bonus Equivalents granted to other employees of the
Company shall be included.

      Section 1.10 "IPO" shall mean the date that the closing of a public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Company to the public occurs and the Common Stock becomes listed
or quoted on a national security exchange or in the NASDAQ National Market
Quotation System.

      Section 1.11 "Period of Employment" shall mean September 1, 2002 through
and including August 31, 2007.

      Section 1.12 "Qualifying Termination of Service" shall mean termination of
Executive's employment with the Company and Affiliated Entities by reason of
Executive's death or Disability or any termination of Executive by the Company
and any Affiliated Entity without Cause. In addition to the termination of
Executive by the Company and any Affiliated Entity without Cause, as defined in
Section 1.6, Executive shall be deemed to have been terminated by the Company
without Cause if Executive resigns from the Company during the Period of
Employment as a result of (i) a relocation of Executive's principal place of
employment to greater than 75 miles from its current location, (ii) a material
diminution of his Base Salary, and/or (iii) a material diminution in his duties
and/or responsibilities, in each case without Executive's consent. For purposes
under circumstances defined under Section 5.4 of the preceding sentence "Base
Salary" shall have the meaning ascribed to it in the Employment Agreement. The
Board, in its reasonable good faith discretion, shall determine the effect of
all matters and questions relating to a Termination of Service, including
without limitation whether a Termination of Service is a Qualifying Termination
of Service. In the event that the Executive disagrees with such Board's
determination, then such matter shall be resolved pursuant to Section 21 of the
Employment Agreement.

      Section 1.13 "Stock Sale" shall mean the date as of which at least a
majority of the Company's then outstanding common stock is sold in a single
transaction or series of substantially related transactions and, unless
otherwise approved by the Board, the consideration paid is cash or marketable
securities.

      Section 1.14 "Termination of Service" shall mean termination of
Executive's employment with the Company and its Affiliated Entities for any
reason. The Board, in its discretion, shall determine the effect of all matters
and questions relating to a Termination of Service, including, without
limitation, whether a Qualifying Termination of Service has occurred.

      Section 1.15 "Terminal Equity Value" shall mean: (i) in the case of an
IPO, the equity value of the Company's outstanding common stock determined based
on the public offering price of the Company's common stock in the IPO and the
number of shares of common stock outstanding immediately prior to the IPO; (ii)
in the case of a Stock Sale, the equity value of the Company's outstanding
common stock determined based on the net proceeds distributable in respect of
the common stock of the Company that is sold in the Stock Sale and the number of

shares of common stock outstanding; and (iii) in the case of an Asset Sale, the
aggregate net proceeds that are or would be distributable in respect of all
outstanding common stock of the Company assuming that the Company paid off its
debt and preferred stock and debt securities, and liquidated on the Asset Sale,
and assuming that any right, warrant or option to acquire any common stock of
the Company entitled to be exercised is converted immediately prior to the
distribution.

      Section 1.16 "Then Effective Ownership Percentage" shall have the meaning
and shall be determined as set forth in Section 3.1 and 3.2, and Schedule A
hereof. The Then Effective Ownership Percentage varies with the Terminal Equity
Value and the Total Shares of Common Stock Outstanding. The maximum Then
Effective Ownership Percentage is 0.333% for a Terminal Equity Value of $375
million or more.

      Section 1.17 "Total Shares of Common Stock Outstanding" shall mean the
total number of shares of Class A Common Stock outstanding immediately prior to
the Trigger Event and without giving effect to the Trigger Event, including (i)
all shares of Class A Common Stock issuable upon exercise or conversion of any
then outstanding options, warrants and Class B Common Stock, plus (ii) the
aggregate Maximum Bonus Equivalents of all employees, including Executive.

      Section 1.18 "Trigger Event" shall mean any of (i) an Asset Sale, (ii) an
IPO, or (iii) a Stock Sale, in each case with a Terminal Equity Value equal to
$175 million or more.

      Section 1.19 "Vested Bonus Equivalent" shall have the meaning ascribe to
it in Section 3.2 hereof.

                                   ARTICLE II.
                     CASH BONUS PAYABLE UPON A TRIGGER EVENT
                     ---------------------------------------

      Section 2.1 Cash Bonus
      ----------- ----------

      Subject to Sections 2.2, 2.3 and 2.4, on the date of the closing of a
Trigger Event, the Company shall pay to Executive a cash bonus ("Cash Bonus")
equal to the product of (a) the sum of the Terminal Equity Value of the Company,
plus the aggregate cash dividends paid by the Company on shares of its common
stock prior to the Trigger Event, multiplied by (b) Executive's Then Effective
Ownership Percentage (as determined pursuant to Section 3.1 or 3.2, as
applicable). For purposes of determining the Cash Bonus, Executive's Then
Effective Ownership Percentage is prorated between the Terminal Equity Values.

      Executive understands and agrees that issuances by the Company after April
30, 2005 of shares, options, warrants or other rights to acquire shares of Class
A Common Stock or any Bonus Equivalents will reduce Executive's Then Effective
Ownership Percentage and thus likely will result in a reduction in any Cash
Bonus payable.

      Section 2.2 Escrow/Holdback
      ----------- ---------------

      In the event any part or all of the consideration payable to the Company
or its stockholders in connection with a Trigger Event is paid into escrow or
subject to holdback provisions, a portion or all of the Cash Bonus payable to
Executive shall similarly be subject to such escrow or holdback provisions, in
the same percentage as the escrowed amount relates to such total consideration.
Thus, if 2% of the consideration payable to the Company (or its stockholders) in
the Trigger Event is placed in escrow, then 2% of the Cash Bonus shall be placed
the Company into escrow; the portion of the Cash Bonus so escrowed shall be paid
to Executive only if and to the extent the escrowed or withheld Trigger Event
consideration is released and paid to the Company (or its stockholders, as
applicable). The terms of any Trigger Event escrow or holdback provisions shall
govern the terms of the Company's right to withhold a portion of the Cash Bonus
provided hereby.

      Section 2.3 No Cash Bonus
      ----------- -------------

      (a) Termination of Employment or Employment Period. In the event prior to
the Trigger Event there is a Termination of Service that is not a Qualifying
Termination of Service, no Cash Bonus will be paid or payable to Executive, and
this agreement shall cease to be of any further force or effect. In the event
the Period of Employment expires prior to the Trigger Event, no Cash Bonus will
be paid or payable to Executive, and this agreement shall cease to be of any
further force or effect. Thus, if Executive resigns, is terminated for Cause or
the Period of Employment terminates and is not extended, prior to a Trigger
Event, then no Cash Bonus or other form of consideration shall be paid. In the
event of a Qualifying Termination of Service, no Cash Bonus will be paid or
payable unless, until and only to the extent a Trigger Event occurs.

      (b) Stock Sale, IPO or Asset Sale with a Terminal Equity Value less than
$175 million. In the event of a Stock Sale, IPO or Asset Sale with a Terminal
Equity Value of less than $175 million, no Cash Bonus will be paid or payable to
Executive, and this agreement shall cease to be of any further force or effect.

      Section 2.4 Insufficient Funds
      ----------- ------------------

      In the event the Company does not have sufficient funds to pay the Cash
Bonus or such payment would violate any of the provisions of any of the
Company's existing or future credit facilities or indentures (collectively, the
"Credit Facilities") then in effect, or the rights and preferences of preferred
stock then outstanding, or any applicable law, then to the extent necessary to
comply with the Credit Facilities, the preferred stock or applicable law, the
Company shall make periodic payments toward the obligation herein to the maximum
allowable under such restrictions up the amount of the obligation plus interest
charges on amounts paid more than 45 days after the Trigger Event, but in no
event in amounts less than a comparable amount paid pari-passu with any equity
payment made pursuant to a Trigger Event. Interest charges applicable herein
shall be on the unpaid balance of the obligation at the then-current Applicable
Federal Rate.

                                  ARTICLE III.
            DETERMINATION OF THEN EFFECTIVE OWNERSHIP PERCENTAGE AND
            --------------------------------------------------------
                              TERMINAL EQUITY VALUE
                              ---------------------

      Section 3.1 Trigger Event During Period of Employment.
      ----------- -----------------------------------------
      In the event of a Trigger Event during the Period of Employment,
Executive's Then Effective Ownership Percentage shall equal the product of:

            -     the quotient of (x) Executive's Maximum Bonus Equivalent
                  divided by (Y) the Total Shares of Common Stock Outstanding;

            -     multiplied by, the Applicable Conversion Ratio for the
                  Terminal Equity Value for such Trigger Event.

The Bonus Payments based on Terminal Equity Values and Then Effective Ownership
Percentages as of April 30, 2005 are set forth on Schedule A attached hereto.

      Section 3.2 Trigger Event following a Qualifying Termination of Service.
      ----------- -----------------------------------------------------------

      In the event of a Trigger Event following a Qualifying Termination of
Service, Executive's Then Effective Ownership Percentage shall equal the product
of:

            -     the quotient of (x) the Vested Bonus Equivalent divided by (Y)
                  the Total Shares of Common Stock Outstanding;

            -     multiplied by, the Applicable Conversion Ratio for the
                  Terminal Equity Value.

For purposes of this Section 3.2, "Vested Bonus Equivalent" means 2,950 as of
April 30, 2005, plus an additional 92 credited on the last day of each full
calendar month (except for the last calendar month, which credit shall be for
109) elapsed from April 30, 2005 and ending with and including the earlier of
(i) last full calendar month prior to the month in which the Qualifying
Termination of Service occurs or (ii) August 31, 2006. In no event, however,
shall the Vested Bonus Equivalent exceed the Maximum Bonus Equivalent (i.e.,
4,439).

For purposes of this Section 3.2, the Terminal Equity Value shall be determined
as of the date of the Qualifying Termination of Service. If a Trigger Event
occurs within nine months following the Qualifying Termination of Service,
however, the Terminal Equity Value as of the Trigger Event (and not the Terminal
Equity Value as of the Qualifying Termination of Service) shall be used to
determine the Applicable Conversion Ratio.

      Section 3.3 Determination of Terminal Equity Value
      ----------- --------------------------------------

      The Board shall determine the Terminal Equity Value, and for purposes of
an a Asset Sale, the Board shall assume that the Company is a willing seller and
sold its assets to a willing purchaser. The Terminal Equity Value shall be
determined as of the Trigger Event, except in the case of a Qualifying
Termination of Service, in which case the Terminal Equity

Value shall be determined as of the date of the Qualifying Termination of
Service. If a Trigger Event occurs within nine months following the Qualifying
Termination of Service, however, the Terminal Equity Value as of the Trigger
Event (and not the Terminal Equity Value as of the Qualifying Termination of
Service) shall be used to determine the Cash Bonus. The Board shall provide
prompt written notice to Executive of such valuation.

      If Executive disagrees with such valuation by the Board, Executive may, by
written notice to the Board no later than 10 days after Executive is notified of
the Board's determination of Terminal Equity Value, elect to have a nationally
recognized valuation firm conduct a separate determination of such Terminal
Equity Value. Any valuation firm selected must complete its determination within
75 days of its engagement and must base its determination upon the applicable
factor(s) identified in the definition of Terminal Equity Value. Executive shall
initially select a nationally recognized valuation firm to conduct the
determination. The Company must approve or deny the valuation firm selected by
Executive within 15 business days, which approval shall not be unreasonably
withheld. If the Company denies Executive's proposed valuation firm, Executive
can select an alternate firm and the Company will have 10 business days to
reasonably approve or deny such selection. If the Company denies Executive's
second proposed valuation firm, Executive can select a third firm and the
Company will have 5 business days to reasonably approve or deny such selection
provided, however, that if the Company denies 3 nationally recognized valuation
firms selected by Executive, Executive can require the Company to choose one of
the 3 nominated firms within 5 business days, and if the Company does not select
a firm Executive may select one of such firms. The Company shall be deemed to
have approved any selection by Executive if it does not provide an approve or
deny response within the specified time period.

      Following the determination of Terminal Equity Value by the valuation
firm, the Company and Executive will have a 3 week period to mutually agree that
the Terminal Equity Value will be the average or some other permutation of the
Board's determination and the valuation firm's determination. If the Company and
Executive do not agree to a Terminal Equity Value based on those two
determinations within 3 weeks, the valuation firm and the Company will choose a
second nationally recognized valuation firm by each proposing 3 candidates to
the Company and Executive simultaneously within two weeks, and any candidate
appearing on both lists will be selected (if more than one candidate appears on
both lists the final selection will be determined by chance (i.e., flipping a
coin)). If no candidate appears on both lists, the process will be repeated
until a common candidate is found or the Company, in its sole discretion, can
select any firm previously submitted by Executive. The second valuation firm
will have 75 days to complete its determination of Terminal Equity Value (and if
not completed the average of the Company's and the fast valuation firm's
determinations will be used). After the second valuation firm completes its
determination, the Terminal Equity Value used will be the average of the two
determinations that are closest in value from among the three determinations
(the Board's, the first valuation firm's, and the second valuation firm's).

      The Company will pay the costs of the first valuation firm, except that
the Company shall be entitled to reimbursement from Executive for such costs if
the first valuation firm's valuation is within 5% of the Board's valuation. The
Company and Executive will

equally share the costs of the second valuation firm, if needed. If the Company
is entitled to reimbursement from Executive for any costs in accordance with the
preceding two sentences, the Company may offset all or a portion of the amount
owing to the Company by Executive against any amount (including, without
limitation, any amount of compensation) otherwise payable to Executive. The
Company and Executive shall be bound by the final determination of Terminal
Equity Value pursuant to this Section 3.3.

      Section 3.4 Revisions to Applicable Conversion Ratios and Terminal Equity
      ----------- -------------------------------------------------------------
      Value Thresholds
      ----------------

      The Company and Executive shall negotiate in good faith revisions to the
Applicable Conversion Ratios and the Terminal Equity Value thresholds, as
applicable, in the event of any acquisitions, dispositions, combinations,
mergers, consolidation, reorganization or similar corporate transaction that is
reasonably expected to materially affect the Terminal Equity Value of the
Company.

                                   ARTICLE IV.
                                 MISCELLANEOUS
                                 -------------

      Section 4.1 Administration
      ----------- --------------

      The Board shall have the power to interpret this Agreement and to adopt
such rules for the interpretation and application of this Agreement as are
consistent herewith and to interpret, amend or revoke any such rules. All
actions taken and all interpretations and determinations made by the Board in
good faith, shall be made consistent with those made or applicable to the
Company's other senior management shareholders, and shall be final and binding
upon Executive, the Company and all other interested persons. No member of the
Board shall be personally liable for any action, determination, or
interpretation made in good faith.

      Section 4.2 Notices
      ----------- -------

      Any notice or other communication given pursuant to this Agreement shall
be in writing and shall be personally delivered, sent by overnight courier or
express mail, or mailed by first class certified or registered mail, postage
prepaid, return receipt requested as follows:

      (a) if to the Company:

      Skilled Healthcare Group, Inc.
      Attention: Board of Directors
      27442 Portola Parkway,
      Suite 200
      Foothill Ranch, California 92610

      With copy to:

      Heritage Partners, Inc.
      30 Rowes Wharf, Suite 300
      Boston, MA 02110
      Attn: Mark J. Jrolf

      (b) if to Executive:

      Mr. Mark Wortley
      3816 Spring Mountain Road
      Fort Smith, AR 72916

      Either party may change its address set forth above by written notice
given to the other party in accordance with the foregoing. Any notice shall be
effective when personally delivered, 2 business days after being delivered to
overnight courier or express mail, or 5 business days after by first class
certified or registered mail, postage prepaid, return receipt requested.

      Section 4.3 Titles
      ----------- ------

      Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

      Section 4.4 Governing Law
      ----------- -------------

      This Agreement and the legal relations hereby created between the parties
hereto shall be governed by and construed under and in accordance with the laws
of the State of California, without regard to choice of law provisions thereof.

      Section 4.5 Amendments
      ----------- ----------

      No amendment or waiver of this Agreement or any term, covenant, or
condition hereof shall be binding upon the party against whom enforcement of
such amendment or waiver is sought unless it is made in writing and signed by or
on behalf of such party. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.

      Section 4.6 Assignment
      ----------- ----------

      This Agreement is personal in its nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder; provided, however, that, in the event of a
merger, consolidation, or transfer or sale of all or substantially all of the
assets or stock of the Company with or to any other individual(s)

or entity, this Agreement shall be binding upon and inure to the benefit of such
successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder.

      IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of May________, 2005.

                                                 SKILLED HEALTHCARE GROUP, INC.
                                                 a Delaware corporation



                                                 By  /s/ Boyd Hendrickson
                                                     ---------------------------
                                                     Boyd Hendrickson
                                                     Chief Executive Officer

EXECUTIVE

/s/ Mark Wortley
- ------------------------
Mark Wortley

                                   SCHEDULE A
                                   ----------

                                                                      BONUS
                                                                      -----
                                                                PAYMENT BASED ON
                                                                ----------------
                                           THEN EFFECTIVE        THEN EFFECTIVE
                                           --------------        --------------
                           APPLICABLE        OWNERSHIP             OWNERSHIP
                           ----------        ---------             ---------
                           CONVERSION     PERCENTAGE AS OF      PERCENTAGE AS OF
                           ----------     ----------------      ----------------
 TERMINAL EQUITY VALUE       RATIO            4/30/05                4/30/05
 ---------------------       -----            -------                -------

     $175,000,000            0.250             0.083%               $145,250
     $200,000,000            0.344             0.115%               $230,000
     $225,000,000            0.438             0.146%               $328,500
     $250,000,000            0.531             0.177%               $442,500
     $275,000,000            0.625             0.208%               $572,000
     $300,000,000            0.719             0.240%               $720,000
     $325,000,000            0.813             0.271%               $880,750
     $350,000,000            0.906             0.302%             $1,057,000
     $375,000,000            1.000             0.333%             $1,248,750

Then Effective Ownership Percentage is prorated between the Terminal Equity
Values.

The Terminal Equity Value shall be determined as of the Trigger Event, except in
the case of a Qualifying Termination of Service, in which case the Terminal
Equity Value shall be determined as of the date of the Qualifying Termination of
Service. If a Trigger Event occurs within nine months following the Qualifying
Termination of Service, however, the Terminal Equity Value as of the Trigger
Event (and not the Terminal Equity Value as of the Qualifying Termination of
Service) shall be used to determine the Cash Bonus.

Then Effective Ownership Percentage as of 4/30/05 is based on 1,332,938 Total
Shares of Common Stock Outstanding, which includes 1,193,587 shares of Class A
Common Stock, an aggregate of 17,768 Maximum Bonus Equivalents of Executive and
Mr. King, 65,731 shares of Class B Common Stock held by Messrs. Hendrickson,
Lynch and Rapp, 5,475 employee options and 50,377 warrants. The Then Effective
Ownership Percentage and Bonus Payment will decrease in accordance with the
terms of this agreement in the event of the issuance of any shares of Class A
Common Stock, or any rights to acquire Class A Common Stock, or any Bonus
Equivalents.

EX-10.11

                                                                   Exhibit 10.11









                                  OFFICE LEASE










                        LANDLORD: CT FOOTHILL 10/241, LLC










                           TENANT: Fountain View, Inc.



                                  OFFICE LEASE
                                Table of Contents



Section                                                                     Page
  No.     Title                                                              No.
- -------   -----                                                             ----
                                                                      
1.        Terms and Conditions.................................................1
2.        Lease of Premises....................................................3
3.        Common Areas.........................................................3
4.        Term.................................................................4
5.        Rent.................................................................4
6.        Operating Expenses...................................................5
7.        Security Deposit.....................................................9
8.        Use.................................................................10
9.        Payments and Notices................................................11
10.       Brokers.............................................................13
11.       Surrender; Holding Over.............................................12
12.       Taxes on Tenant's Property..........................................12
13.       Condition Of Premises; Repairs......................................12
14.       Alterations.........................................................13
15.       Liens...............................................................15
16.       Assignment and Subletting...........................................15
17.       Entry by Landlord...................................................17
18.       Utilities and Services..............................................18
19.       Indemnification and Exculpation.....................................20
20.       Damage or Destruction...............................................20
21.       Eminent Domain......................................................22
22.       Tenant's Insurance..................................................23
23.       Landlord's Insurance................................................24
24.       Waivers of Subrogation..............................................24
25.       Tenant's Default and Landlord's Remedies............................25
26.       Landlord's Default..................................................27
27.       Subordination.......................................................27
28.       Estoppel Certificate................................................28
29.       Performance by Tenant; Interest and Late Charges....................28
30.       Cure Rights of Landlord's Mortgagees and Lessors....................29
31.       Transfer of Owner's Interest........................................29
32.       Quiet Enjoyment.....................................................29
33.       Parking.............................................................29
34.       Limitation on Landlord's Liability..................................30
35.       Hazardous Materials.................................................30
36.       Miscellaneous.......................................................31




                                                                     Section
EXHIBITS                                                         First Reference
- --------                                                         ---------------
                                                           
A.        Site Plan.....................................................1.5
B.        Floor Plan....................................................1.7
C.        Square Footage Determination..................................1.6
D.        Work Letter Agreement.........................................1.7
E.        Sample Form of Notice of Lease Term Dates.....................4.1
F.        Rules and Regulations.........................................8.1
G.        Parking Rules and Regulations................................34.3
H.        Landlord's Lender information..................................30


RIDERS
- ------
No. 1 Annual Basic Rent
No. 2 Outside Commencement Date

                                        i



                                  OFFICE LEASE

      This LEASE is made as of the 26 day of August, 2002, by and between
Landlord and Tenant:

                                   WITNESSETH:

      1. Terms and Conditions. For the purposes of this Lease, the following
terms shall have the following definitions and meanings:

            1.1 Landlord:             CT FOOTHILL 10/241, LLC,
                                      a California limited liability company

            1.2 Landlord's Address:   CT Foothill 10/241, LLC
                                      3501 Jamboree Road, Suite 2000
                                      Newport Beach, California 92660
                                      Attn: Robert J. Searles

            With a copy to:           CT Realty Corporation
                                      20151 S.W. Birch, Suite 200
                                      Newport Beach, CA 92660
                                      Attn: Dan Culler

            1.3 Tenant:               Fountain View, Inc. a Delaware Corporation

            1.4 Tenant's Address:     27442 Portola Pkwy., Suite 200
                                      Foothill Ranch, CA 92610
                                      Attn: Legal Department
            With a copy to:
                                      ------------------------------------------

                                      ------------------------------------------
                                      Attn:
                                           -------------------------------------

            1.5 Site: Foothill 10/241 located at 27422 - 27442 Portola Parkway
      in the City of Foothill Ranch, County of Orange, State of California, as
      shown on the site plan attached hereto as Exhibit "A".

            1.6 Building: A three (3) story office building located on the Site,
      containing approximately 104,310 rentable square feet ("RSF") (subject to
      adjustment as set forth in Exhibit "C"), whose address is 27442 Portola
      Parkway, Suite 200, Portola Parkway, Foothill Ranch, 92610, California
      (the "Building").

            1.7 Premises: The Premises consists of approximately 19,784 rentable
      square feet ("RSF") and 17,937 usable square feet ("USF") on the second
      floor as generally shown on the floor plan attached hereto as Exhibit "B".
      The actual layout and square footage of the Premises shall be subject to
      the Final Plan as defined in Exhibit "D" and architectural measurement of
      the Premises, according to Exhibit "C". Additionally, Tenant shall have an
      ongoing First Opportunity to Lease any space that may become available on
      the same floor (Second Floor) as the Premises. Tenant's First Opportunity
      to Lease is subject to Tenant's response to Landlord within 10 days of
      notification by Landlord to Tenant of third party interest in leasing all
      or any portion of available space. The terms and conditions for any, and
      all, additional space shall be at the then current "fair market" rental
      rates for like sized space in the FOOTHILL PLAZA.

            1.8 Rentable Square Feet: See Exhibit "C".

            1.9 Commencement Date: See Exhibit "D".

            1.10 Estimated Commencement Dates: Scheduled monthly rental payments
      to begin three and one half months (3 l/2) after occupancy ("Rent Free
      Early Occupancy") which is anticipated to begin April 15, 2003, with
      Tenant occupancy beginning

                                       1



      January 1,2003. The estimated commencement date of the term of the lease
      and Tenant's obligation for the payment of rent under the lease shall be
      determined by Substantial Completion as defined in Exhibit "D" paragraph
      7.

            1.11 Term: Ninety (90) months plus Three and One Half (3.5) months
      of Rent Free Early Occupancy. Therefore, Tenant shall occupy the Premises
      for a total of Ninety Three and One Half (93.5) months, beginning April
      15, 2003.

            1.12 OPTION TO EXTEND: Subject to Tenant providing Landlord with at
      least Nine months prior written notice and Tenant is not in default of any
      terms of the Lease, Tenant shall have the Option to Extend the Lease for
      all space then under lease by Tenant in the Building, for one (1)
      additional term of Five (5) years. The base rental rate shall be the then
      current "fair market" rental rates for like space in the Foothill Plaza.
      All other terms and conditions of the initial lease shall remain the same
      for the extended term of the lease.

            1.13 Annual Basic Rent: See Rider No. 1. Annual Basic Rent is
      payable in monthly installments ("Monthly Basic Rent"). The Annual Basic
      Rent is subject to adjustment as provided in Exhibit "C".

            1.14 Tenant's Proportionate Share of Operating Expenses: Tenant's
      Proportionate Share of Operating Expenses shall consist of two (2)
      separate percentages which shall be adjusted based on Tenant's Rentable
      Square Footage as determined by the Final Plan:

            (a)   18.97%, which is Tenant's Proportionate Share of the Building,
which amount is equal to a fraction, the numerator of which is the Rentable
Square Feet of the Premises (as set forth in Subparagraph 1.7 above), and the
denominator of which is the Rentable Square Feet of the Building (as set forth
in Subparagraph 1.6 above); and

            (b)   9.48%, which is Tenant's Proportionate Share of the Project,
which amount is equal to a fraction, the numerator of which is the Rentable
Square Feet of the Premises (as set forth in Subparagraph 1.7 above), and the
denominator of which is the Rentable Square Feet of the Project (as set forth in
Subparagraph 1.23 below). (See Exhibit "C")

            1.15 Landlord's Contribution to Operating Expenses: Tenant's
      Proportionate Share of Operating Expenses incurred by Landlord during the
      Base Year shall consist of the following two (2) separate components: (a)
      with respect to the Building Operating Expenses, Tenant's Proportionate
      Share of the Building (as set forth in Subparagraph 1.14(a) above),
      multiplied by the Building Operating Expenses incurred during the Base
      Year; and (b) with respect to the Project Operating Expenses, Tenant's
      Proportionate Share of the Project (as set forth in Subparagraph 1.14(b)
      above), multiplied by the Project Operating Expenses.

            As used herein, the "Base Year" shall mean the calendar year of
      2003.

            1.16 Security Deposit: Tenant shall deposit with Landlord a Security
      Deposit in the amount of $294,000.00 (seven months of rent calculated at
      $2.10 per rentable square foot). Beginning on the anniversary of the
      Commencement Date of the Lease and continuing on first through the third
      anniversary of the Commencement Date of the Lease thereafter, Tenant shall
      receive a credit to Basic Rent in the amount of 1/7 of the Security
      Deposit held by Landlord and on the fourth anniversary Tenant shall
      receive a credit equal to 2/7 of the security deposit and on the fifth
      anniversary Tenant shall receive a credit equal to 1/7 of the Security
      Deposit thereby reducing the Security Deposit at the end of this period to
      $84,000.00 where it will remain until the expiration of the Lease.
      However, if Tenant is not out of bankruptcy, has been in Default under the
      terms of the Lease at any time during the twelve (12) months prior to the
      month in which the Security Deposit credit is due and/or has made more
      than one (1) Late Payment during the 12 month period immediately preceding
      the month in which the Security Deposit credit is due, the Security
      Deposit credit otherwise

                                       2



      creditable at that anniversary shall not be credited towards basic rent
      and shall be held by Landlord until the expiration of the Lease.

            1.17 Permitted Use: General Purpose Office.

            1.18 Brokers: CB Richard Ellis representing Landlord and Schuler
      Commercial representing Tenant.

            1.19 Interest Rate: The lesser of: (a) the rate announced from time
      to time by Bank of America (or if the entity named herein ceases to exist
      or ceases to publish such rate, by the largest (as measured by deposits)
      chartered bank operating in the state in which the Building is located) as
      its "prime rate" or "reference rate", plus five percent (5%); or (b) the
      maximum rate permitted by law.

            1.20 Leasehold Improvements: The tenant improvements installed or to
      be installed for the Premises as described in the Work Letter Agreement
      attached hereto as Exhibit "D".

            1.21 Parking: 4 unreserved parking spaces per each 1,000 rentable
      square feet leased by Tenant. Additionally, Tenant shall have the right to
      One (1) exclusively marked parking space near the building entrance facing
      the 241 Transportation Corridor. The Tenant shall be responsible for the
      cost to install a Landlord approved sign to identify the space.

            1.22 Guarantor(s): N/A (none)

            1.23 Project: The Site, the two (2), three (3)-story buildings
      located thereon (including the Building), the Common Areas, the
      landscaping, parking facilities and all other improvements and facilities
      now or subsequently located on the Site from time to time, known as
      Foothill 10/241. The aggregate rentable square feet of the two (2) office
      buildings in the Project (including the Building) is approximately 208,620
      rentable square feet. (See Exhibit "C")

      2. Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, the Premises described in Subparagraph 1.7 above, improved
or to be improved with the Leasehold Improvements. Such lease is upon, and
subject to, the terms, covenants and conditions herein set forth and each party
covenants, as a material part of the consideration for this Lease, to keep and
perform their respective obligations under this Lease.

      3. Common Areas.

            3.1 Definitions: Tenant's Rights. During the Term of this Lease,
      Tenant shall have the nonexclusive right to use, in common with Landlord,
      other tenants in the Project and landlord and tenants of the adjacent
      parcels under the Operation and Reciprocal Easement Agreement recorded
      October 15, 1997 as Instrument No. 19970516456, as amended, and subject to
      the Rules and Regulations referred to in Paragraph 8 below, those portions
      of the Project (the "Project Common Areas") not leased or designated for
      lease to tenants that are provided for use in common by (or by the
      sublessees, agents, employees, customers or licensees of) Landlord, Tenant
      and any another tenants of the Project, whether or not those areas are
      open to the general public. The Project Common Areas shall include,
      without limitation, any fixtures, systems, decor, facilities and
      landscaping contained, maintained or used in connection with those areas,
      and shall be deemed to include any sidewalks adjacent to the Project, any
      pedestrian walkway system, parking or other facilities open to the general
      public. The common areas appurtenant to the Building shall be referred to
      herein as the "Building Common Areas" and shall include the following
      areas:

            (a)   the common entrances, lobbies, restrooms on multi-tenant
floors, elevators, stairways and access ways, loading docks, ramps, drives and
platforms and any passageways and serviceways thereto, and the common pipes,
conduits, wires and appurtenant equipment serving the Premises; and

                                       3



            (b)   the parking structure and parking areas (subject to Paragraph
33 below), loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas and plaza area appurtenant to
the Building.

            The Building Common Areas and the Project Common Areas shall be
referred to herein collectively as the "Common Areas."

            3.2 Landlord's Reserved Rights. Landlord reserves the right from
      time to time to use any of the Common Areas and to do any of the
      following, as long as such acts do not unreasonably interfere with
      Tenant's use of or access to the Premises:

            (a)   expand the Building and construct or alter other buildings or
improvements on the Site;

            (b)   make any changes, additions, improvements, repairs or
replacements in or to the Project, the Site, the Common Areas and/or the
Building (including the Premises if required to do so by any law or regulation)
and the fixtures and equipment thereof, including, without limitation: (i)
maintenance, replacement and relocation of pipes, ducts, conduits, wires and
meters, and (ii) changes in the location, size, shape and number of driveways,
entrances, stairways, elevators, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas and walkways, and subject to Paragraph 33
below, parking spaces and parking areas;

            (c)   close temporarily any of the Common Areas while engaged in
making repairs, improvements or alterations to the Project, Site and/or Building
so long as Tenant is provided with reasonable access to the Premises and
reasonable parking; and

            (d)   perform such other acts and make such other changes with
respect to the Project, Site, Common Areas and Building as Landlord may, in the
exercise of sound business judgment, deem to be appropriate.

      4. Term.

            4.1 Term; Notice of Lease Dates. The Term of this Lease shall be for
      the period designated in Subparagraph 1.11 commencing on the Commencement
      Date (as determined pursuant to Exhibit "D"), and ending on the expiration
      of such period, unless the Term is sooner terminated as provided in this
      Lease. Within fifteen (15) days after Landlord's written request, Tenant
      shall execute a written confirmation of the Commencement Date and
      expiration date of the Term in the form of the Notice of Lease Term Dates
      attached hereto as Exhibit "E". The Notice of Lease Term Dates shall be
      binding upon Tenant unless Tenant objects thereto in writing within such
      fifteen (15) day period.

            4.2 Estimated Commencement Date. It is estimated by the parties that
      the Term of this Lease will commence on the Estimated Commencement Date
      set forth in Subparagraph 1.10.

      5. Rent.

            5.1 Basic Rent. Tenant agrees to pay Landlord, as basic rent for the
      Premises, the Annual Basic Rent designated in Subparagraph 1.13. The
      Annual Basic Rent shall be paid by Tenant in twelve (12) equal monthly
      installments of Monthly Basic Rent designated in Subparagraph 1.13 in
      advance on the first day of each and every calendar, month during the
      Term. Tenant shall pay the first full month's Monthly Basic Rent $42,000
      concurrently with the execution of this Lease. Annual Basic Rent for any
      partial month shall be prorated in the proportion mat the number of days
      this Lease is in effect during such month bears to the actual number of
      days in such month.

            5.2 Additional Rent. All amounts and charges payable by Tenant under
      this Lease in addition to the Annual Basic Rent described in Subparagraph
      5.1 above (including, without limitation, payments for insurance, repairs
      and Excess Expenses as provided in Paragraph 6) shall be considered
      additional rent for the purposes of this Lease, and the word "rent" in
      this Lease shall include such additional rent unless the

                                       4



      context specifically or clearly implies that only the Annual Basic Rent is
      referenced. The Annual Basic Rent and additional rent shall be paid to
      Landlord as provided in Paragraph 9, without any prior demand therefore
      and without any deduction or offset whatever, in lawful money of the
      United States of America.

      6. Operating Expenses.

            6.1 Excess Expenses. Tenant shall pay to Landlord, in the manner and
      at the times set forth in the following provisions of this Paragraph 6,
      the amount by which Tenant's Proportionate Share of Operating Expenses
      (which consists of two (2) separate components as set forth in
      Subparagraph 1.14 above) exceeds Landlord's Contribution to Operating
      Expenses (which consists of two (2) separate components as set forth in
      Subparagraph 1.15 above). Such excess amounts shall be collectively
      referred to in this Paragraph 6 as "Excess Expenses".

            6.2 Definition of Operating Expenses. As used in this Lease, the
      term "Operating Expenses" shall mean collectively, the "Project Operating
      Expenses" and the "Building Operating Expenses." As used herein, "Building
      Operating Expenses" shall include all costs and expenses for janitorial
      services for the Building, all costs and expenses for utilities which are
      separately metered to the Building, and all other costs and expenses of
      operation and maintenance of the Building as determined by generally
      accepted accounting principles consistently applied, which Landlord may,
      from time to time, separately allocate to the Building, all of which shall
      be calculated assuming the Building is ninety five percent (95%) occupied
      (or calculated based on the actual level of occupancy for the calendar
      year in question if the Building is more than ninety five percent (95%)
      occupied) during such calendar year. As used herein, "Project Operating
      Expenses" shall include all costs and expenses of operation and
      maintenance of the Project, as determined by generally accepted accounting
      principles consistently applied, calculated assuming both buildings in the
      Project are ninety five percent (95%) occupied (or calculated based on the
      actual level of occupancy for the calendar year in question if the two (2)
      buildings in the Project are more than ninety five percent (95%) occupied)
      during such calendar year, excluding, however, the Building Operating
      Expenses for the two (2) buildings in the Project. Project Operating
      Expenses shall include the following costs by way of illustration but not
      limitation: (a) Real Property Taxes and Assessments (as defined in
      Subparagraph 6.4 below) and any taxes or assessments imposed in lieu
      thereof; (b) any and all assessments imposed with respect to the Project
      pursuant to any covenants, conditions and restrictions affecting the
      Project and/or the Reciprocal Easement Agreement; (c) water and sewer
      charges and the costs of electricity, heating, ventilating, air
      conditioning and other utilities; (d) utilities surcharges and any other
      costs, levies or assessments resulting from statutes or regulations
      promulgated by any governmental authority in connection with the use or
      occupancy of the Project or the parking facilities serving the Project;
      (e) costs of insurance obtained by Landlord pursuant to Paragraph 23 of
      this Lease, including any deductibles paid by Landlord; (f) waste disposal
      and janitorial services; (g) security; (h) labor; (i) costs incurred in
      the management of the Project, including, without limitation: (1)
      supplies, (2) wages and salaries (and payroll taxes and similar
      governmental charges related thereto) of employees used directly in the
      management, operation and maintenance of the Project, (3) Project
      management office rental (if such management office is located on the
      Project) at a cost not to exceed the fair market rental value for such
      office in comparable suburban Class A office buildings in South Orange
      County and excluding any portion of such office which is occupied
      principally for marketing purposes; and (4) a management/administrative
      fee not to exceed five percent (5%) of the annual gross revenues of the
      Project exclusive of the proceeds of financing or a sale of the Project;
      (j) supplies, materials, equipment and tools; (k) repair and maintenance
      of the elevators and the structural portions of the improvements in the
      Project, including the plumbing, heating, ventilating, air-conditioning
      and electrical systems installed or furnished by Landlord; (1)
      maintenance, costs and upkeep of all parking and Common Areas; (m)
      depreciation on a straight line basis and rental of personal property used
      in maintenance; (n) amortization on a straight-line basis over the useful
      life of all costs of

                                       5



      costs of any disputes between Landlord and its employees (if any) not
      engaged in Building operation, disputes of Landlord with Building
      management, or outside fees paid in connection with disputes with other
      tenants.

            (j)   any compensation paid to clerks, attendants or other persons
in commercial concessions operated by or on behalf of Landlord;

            (k)   electric power costs for which any tenant directly contracts
with the local public service company or other supplier and is obligated to pay
for the same, provided that for determining the electric power costs component
of Operating Expenses, the square footage of any such tenant's leased premises
shall be excluded from the denominator used for calculating Tenant's
Proportionate Share;

            (l)   costs arising from Landlord's charitable or political
contributions;

            (m)   penalties incurred due to Landlord's failure to comply with
any applicable laws, rules, codes, regulations or other governmental
requirements, or any covenants, conditions and restrictions (or the like);

            (n)   any personal property taxes payable by Tenant or by other
tenants of the Project;

            (o)   utility connection fees, permit fees and other expenses
related to the completion of the building for occupancy; and

            (p)   costs of any items for which Landlord receives reimbursement
from insurance proceeds or a third party. Insurance proceeds shall be excluded
from Operating Expenses in the year in which they are received, except that any
deductible amount (of an amount otherwise qualifying as Operating Expense) under
any insurance policy shall be included within Operating Expenses.

            Landlord agrees that since one of the purposes of Operating Expenses
and the gross up provision is to allow Landlord to require Tenant to pay for the
costs attributable to its Premises, Landlord agrees that (i) Landlord will not
collect or be entitled to collect Operating Expenses not actually paid by
Landlord in connection with the operation of the Building or Project; (ii)
Landlord shall make no profit from Landlord's collection of Operating Expenses;
and (iii) Tenant's obligation to pay its proportionate share of any Real
Property Taxes and Assessments shall be calculated as if Landlord had paid same
in the maximum number of installments permitted (inclusive of interest charges,
if any, payable to the taxing authority if Landlord had paid same in the maximum
number of installments permitted), even if Landlord elected to make payment on a
lump sum basis or otherwise.

            6.4 Definition of Real Property Taxes and Assessments. All Real
      Property Taxes and Assessments shall be adjusted to reflect an assumption
      that the buildings in the Project are fully assessed for real property tax
      purposes as completed buildings ready for occupancy. As used in this
      Lease, the term "Real Property Taxes and Assessments" shall mean: any form
      of assessment, license fee, license tax, business license fee, commercial
      rental tax, levy, charge, improvement bond, tax or similar imposition
      imposed by any authority having the direct power to tax, including any
      city, county, state or federal government, or any school, agricultural,
      lighting, drainage or other improvement or special assessment district
      thereof, as against any legal or equitable interest of Landlord in the
      Project, including the following by way of illustration but not
      limitation:

            (a)   any tax on Landlord's "right" to rent or "right" to other
income from the Premises or as against Landlord's business of leasing the
Premises;

            (b)   any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of the state
of California in June, 1978 election and that assessments, taxes, fees, levies

                                       7



and charges may be imposed by governmental agencies for such services as fire
protection, street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants. It is the intention of Tenant and Landlord that all such new and
increased assessments, taxes, fees, levies and charges be included within the
definition of "real property taxes" for the purpose of this Lease;

            (c)   Any assessment, tax, fee, levy or charge allocable to or
measured by the area of the Premises or other premises in the Project or the
rent payable by Tenant hereunder or other tenants of the Project, including,
without limitation, any gross receipts tax or excise tax levied by state, city
or federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof but not on Landlord's other
operations;

            (d)   any assessment, tax, fee, levy or charge upon this transaction
or any document to which Tenant is a party, creating or transferring an interest
or an estate in the Premises; and/or

            (e)   any assessment, tax, fee, levy or charge by any governmental
agency related to any transportation plan, fund or system (including assessment
districts) instituted within the geographic area of which the Project is a part.

            If Landlord fails to contest the validity of any tax or assessment
which Landlord is legally entitled to contest, or if Landlord elects not to
contest any tax assessment within thirty (30) days of Tenant's request that
Landlord do so, Tenant shall have the right, in Tenant's or Landlord's name, but
at Tenant's sole cost and expense, to contest the validity of any tax or
assessment or assessed valuation of the Building by appropriate proceedings
timely instituted; provided that: (a) Tenant gives Landlord written notice of
Tenants' intention to do so prior to the date on which Tenant is obligated to
pay the next semi-annual installment of such taxes to the taxing authority; (b)
Tenant makes timely payment to Landlord of any Real Property Taxes and
Assessments payable by Tenant under this Lease; (C) no later than thirty (30)
days prior to the date on which Landlord is obligated to pay the next
semi-annual installment of such taxes to the taxing authority, Tenant requests
Landlord, in writing, to pay such taxes under protest; and Tenant diligently
prosecutes any such contest. Landlord shall, if requested by Tenant, cooperate
with Tenant in any such proceedings; provided, however, that Landlord shall not
be liable for any expenses whatsoever in connection therewith, and Tenant shall
protect, indemnify, and reimburse Landlord for all claims, loss, cost,
liability, expense, attorneys' fees or damages resulting therefrom. If Tenant
prevails in such tax contest, Landlord shall, within thirty (30) days following
Landlord's receipt of the refund of any overpaid taxes, pay to Tenant Tenant's
Proportionate Share of the net amount of any such overpaid taxes which were paid
by Tenant during the Lease Term, minus any expenses incurred in connection with
any such tax contest.

            The foregoing provisions of this Subparagraph 6.4 above shall not
include Landlord's federal or state income, franchise, inheritance or estate
taxes.

            6.5 Estimate Statement. By the first day of each calendar year
      during the Term of this Lease after the Base Year, Landlord shall endeavor
      to deliver to Tenant a statement ("Estimate Statement" ) estimating the
      Operating Expenses for the current calendar year and the estimated amount
      of Excess Expenses payable by Tenant. Landlord shall have the right during
      any calendar year to deliver a revised Estimate Statement showing the
      Excess Expenses for such calendar year if Landlord determines that the
      Excess Expenses are greater than those set forth in the original Estimate
      Statement (or previously delivered revised Estimate Statement) for such
      calendar year. The Excess Expenses shown on the Estimate Statement (or
      revised Estimate Statement, as applicable) shall be divided into twelve
      (12) equal monthly installments, and Tenant shall pay to Landlord,
      concurrently with the regular monthly rent payment next due following the
      receipt of the Estimate Statement (or revised Estimate Statement, as
      applicable), an amount equal to one (1) monthly installment of such Excess
      Expenses multiplied by the number of months from January in the calendar
      year in which such statement is submitted to the month of such payment,
      both months inclusive (less any amounts previously paid by Tenant with
      respect to any previously

                                       8


      delivered Estimate Statement or revised Estimate Statement for such
      calendar year, Installments shall be paid concurrently with the regular
      monthly rent payments for the balance of the calendar year and shall
      continue until the next calendar year's Estimate Statement (or current
      calendar year's revised Estimate Statement) is received.

            6.6 Actual Statement. By the first day of April of each succeeding
      calendar year during the Term of this Lease, Landlord shall endeavor to
      deliver to Tenant a substantially detailed statement ("Actual Statement")
      of the actual Operating Expenses and Excess Expenses for the immediately
      preceding calendar year. Landlord shall show by account the total
      Operating Expenses including detailed Excess Expense for the
      Building/Project and all adjustments corresponding to the requirements as
      set forth herein. Landlord shall provide in reasonable detail its
      calculation of Tenant's prorata share of Building/Project Operating
      Expenses, including Landlord's computation setting forth the ratio of the
      Premises rentable square feet to the Building/Project rentable square feet
      stated in 1.14(a) and (b). If the Actual Statement reveals that Excess
      Expenses were overstated or understated in any Estimate Statement (or
      revised Estimate Statement) previously delivered by Landlord pursuant to
      Subparagraph 6.5 above, then within thirty (30) days after delivery of the
      Actual Statement, Tenant shall pay to Landlord the amount of any such
      underpayment, or, Landlord shall pay to Tenant (or credit against the next
      monthly rent falling due), the amount of such overpayment, as the case may
      be.

            6.7 No Release. Any delay or failure by Landlord in delivering any
      Estimate Or Actual Statement pursuant to this Paragraph 6 shall not
      constitute a waiver of its right to receive Tenant's payment of Excess
      Expenses, nor shall it relieve Tenant of its obligations to pay Excess
      Expenses pursuant to this Paragraph 6, except that Tenant shall not be
      obligated to make any payments based on such Estimate or Actual Statement
      until thirty (30) days after receipt of such statement.

            6.8 Tenant's Audit Rights. If Tenant disputes the amount of
      Operating Expenses (including Tenant's Base Year) set forth in any Actual
      Statement delivered by Landlord, Tenant shall have the right, at its own
      cost and expense to audit or inspect Landlord's detailed records each year
      with respect to Building/Project Operating Expenses, as well as all other
      additional rent payable by Tenant pursuant to the Lease for any Lease Year
      (not to exceed one time per year) to be exercised, if at all, not later
      than eighteen (18) months following receipt of such Actual Statement.
      Pursuant to the foregoing, Landlord shall be obligated to keep such
      records for all Lease Years associated with this Lease until two (2) years
      following the termination of the Lease including any Lease Year prior to
      the Landlord's ownership of the Building/Project. Tenant shall be allowed
      to inspect such records with fifteen (15) days prior written notice at
      Landlord's office. The amounts payable under Subparagraph 6.6 by Landlord
      to Tenant or by Tenant to Landlord as the case may be shall be
      appropriately adjusted on the basis of such audit. If Tenant's audit
      determines that actual Operating Expenses have been overstated by more
      than four percent (4%), then Landlord shall immediately repay such
      overpayment and to Tenant, and Landlord shall also pay Tenant for the cost
      of such audit Should a dispute arise between the parties regarding the
      results of Tenant's audit, either party may cause the dispute to be
      submitted to JAMS/ENDISPUTE ("JAMS") in Orange County, California, for
      binding arbitration. The arbitration shall be conducted in accordance with
      the rules of practice and procedure of JAMS and otherwise pursuant to the
      California Arbitration Act (Code of Civil Procedures Section 1280 et.
      seq.). The arbitrator shall apportion the costs of the arbitration,
      together with the attorneys' fees of the parties, in the manner deemed
      equitable by the arbitrator, it being the intention of the parties that
      the prevailing party ordinarily be entitled to recover its reasonable
      costs and fees.

      7. Security Deposit.

            7.1 Use of Deposit. Tenant, contemporaneously with the execution of
      this Lease, has deposited with Landlord the sum set forth in Subparagraph
      1.16 above, receipt of which is hereby acknowledged by Landlord, said
      deposit being given to secure the faithful

                                       9



      performance by Tenant of all of the terms, covenants and conditions of
      this Lease by Tenant to be kept and performed during the term hereof.
      Tenant agrees that if Tenant shall fail to pay the rent or any other sum
      herein required promptly when due, said deposit may, at the option of
      Landlord (but Landlord shall not be required to), be applied to any rent
      or other sum due and unpaid, and if Tenant violates any of the other
      terms, covenants and conditions of this Lease, said deposit shall be
      applied to any damages suffered by Landlord as a result of Tenant's
      default to the extent of the amount of the damages suffered.

            7.2 No Waiver. Nothing contained in this Paragraph shall in any way
      diminish or be construed as waiving any of Landlord's other remedies as
      provided in Paragraph 25 hereof, or by law or in equity. Should the entire
      security deposit, or any portion thereof, be appropriated and applied by
      Landlord for the payment of overdue rent or other sums due and payable to
      Landlord by Tenant hereunder, then Tenant shall, on the written demand of
      Landlord, forthwith remit to Landlord a sufficient amount in cash to
      restore said security deposit to its original amount, and Tenant's failure
      to do so within fifteen (15) days after the date of such statement of
      demand shall constitute a material breach of this Lease. Should Tenant
      comply with all of the terms, covenants and conditions of this Lease and
      promptly pay all of the rental herein provided for as it falls due, and
      all other sums payable by Tenant to Landlord hereunder, said security
      deposit shall be returned in full to Tenant within fifteen (15) days at
      the end of the term of this Lease, or upon the earlier termination of this
      Lease pursuant to the provisions hereof, except in the event the demised
      premises are sold as a result of the exercise of any power of sale under
      any mortgage or deed of trust, in which event this Lease shall be
      automatically amended to delete any reference to this Paragraph 7, and
      Tenant shall be entitled to immediate reimbursement of its security
      deposit from the party then holding said deposit.

      8. Use.

            8.1 General. Tenant shall use the Premises solely for the Permitted
      Use specified in Subparagraph 1.17, and shall not use or permit the
      Premises to be used for any other use or purpose whatsoever, without first
      obtaining Landlord's written consent which may be granted or withheld by
      Landlord in its absolute discretion. Tenant shall observe and comply with
      the "Rules and Regulations" attached hereto as Exhibit "F", and all
      non-discriminatory modifications thereof and additions thereto from time
      to time put into effect and furnished to Tenant by Landlord. Landlord
      shall not be responsible to Tenant for the violation or non-performance by
      any other tenant or occupant of the Project or the Building of any such
      Rules and Regulations. Tenant shall also observe and comply with all
      requirements of any board of fire underwriters or similar body relating to
      the Premises, and all laws, rules and regulations of all governmental
      agencies having jurisdiction. Tenant shall not use or allow the Premises
      to be used (a) in violation of any recorded covenants, conditions and
      restrictions affecting, the Site, provided Landlord advises Tenant in
      writing of such recorded covenants, conditions and restrictions or of any
      law or governmental rule or regulation, or of any certificate of occupancy
      issued for the Premises or Building, or (b) for any improper, immoral,
      unlawful or reasonably objectionable purpose. Tenant shall not do or
      permit to be done anything which will obstruct or interfere with the
      rights of other tenants or occupants of the Project or the Building, or
      injure or annoy them. Tenant shall not cause, maintain or permit any
      nuisance in, on or about the Premises, the Building, the Project or the
      Site, nor commit or suffer to be committed any waste in, on or about the
      Premises.

            8.2 Effect on Insurance. Tenant shall not do or permit to be done
      anything which will (a) violate or invalidate any insurance policy
      maintained by Landlord or Tenant hereunder, or (b) increase the costs of
      any insurance policy maintained by Landlord pursuant to Paragraph 23 or
      otherwise with respect to the Building, Site or Project. If Tenant's
      occupancy or conduct of its business in or on the Premises results in any
      increase in premiums for any insurance carried by Landlord with respect to
      the Building, Site or Project, Tenant shall pay such increase as
      additional rent within fifteen (15) days after being billed therefore by
      Landlord. If any insurance coverage carried by Landlord pursuant to
      Paragraph 23 or otherwise with respect to the Building, Site or Project
      shall be cancelled or reduced (or cancellation or reduction

                                       10



      thereof shall be threatened) by reason of the use or occupancy of the
      Premises by Tenant or by anyone permitted by Tenant to be upon the
      Premises, and if Tenant fails to remedy such condition within five (5)
      business days after notice thereof (or, in the case of a condition which
      is not objectively capable of being cured within five (5) business days,
      if Tenant fails to commence such cure within five (5) business days or
      fails to diligently and continuously prosecute such cure to completion
      within a reasonable time not to exceed the time period established by the
      insurance carrier), Tenant shall be deemed to be in default under this
      Lease, and Landlord shall have all remedies provided in this Lease, at law
      or in equity, including, without limitation, the right (but not the
      obligation) to enter upon the Premises and attempt to remedy such
      condition at Tenant's cost.

      9. Payments and Notices. All rent and other sums payable by Tenant to
Landlord hereunder shall be paid to Landlord at the first address designated in
Subparagraph 1.2, or to such other persons and/or at such other places as
Landlord may hereafter designate in writing. Any notice required or permitted to
be given hereunder must be in writing and may be given by personal delivery
(including delivery by nationally recognized overnight courier or express
mailing service), or by registered or certified mail, postage prepaid, return
receipt requested, addressed to Tenant at the address(es) designated in
Subparagraph 1.4, or to Landlord at the address(es) designated in Subparagraph
1.2. Either party may, by written notice to the other, specify a different
address for notice purposes.

      10. Brokers. The parties recognize that the broker(s) who negotiated this
Lease are stated in Subparagraph 1.18, and agree that Landlord shall be solely
responsible for the payment of brokerage commissions to said broker(s) as per
separate agreement and that Tenant shall have no responsibility therefore unless
written provision to the contrary has been made. Each party represents and
warrants to the other that, to its knowledge, no other broker, agent or finder
(a) negotiated or was instrumental in negotiating or consummating this Lease on
its behalf, and (b) is or might be entitled to a commission or compensation in
connection with this Lease. Any broker, agent or finder of Tenant whom Tenant
has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify,
defend (by counsel reasonably approved in writing by Landlord) and hold Landlord
harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys' fees and
court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, defend (by counsel reasonably approved in writing by
Tenant) and hold Tenant harmless from and against any and all claims, judgments,
suits, causes of action, damages, losses, liabilities and expenses (including
attorneys' fees and court costs) resulting from any breach by Landlord of the
foregoing representation, including, without limitation, any claims that may be
asserted against Tenant by any broker, agent or finder undisclosed by Landlord
herein. The foregoing indemnities shall survive the expiration or earlier
termination of this Lease.

                                       11



      11. Surrender: Holding Over.

            11.1 Surrender of Premises. Upon the expiration or sooner
      termination of this Lease, Tenant shall surrender all keys for the
      Premises to Landlord, and exclusive possession of the Premises to Landlord
      broom clean and in good condition and repair, reasonable wear and tear
      excepted (and casualty damage excepted), with all of Tenant's personal
      property (and those items, if any, of Leasehold Improvements and Tenant
      Changes identified by Landlord pursuant to Subparagraph 14.2 below)
      removed therefrom and all damage caused by such removal repaired, as
      required pursuant to Subparagraphs 14.2 and 14.3 below. If Tenant fails to
      surrender the Premises on the expiration or earlier termination of this
      Lease despite demand to do so by Landlord (including upon the expiration
      of any subsequent month-to-month tenancy pursuant to Subparagraph 11.2
      below), with such removal and repair obligations completed, then, in
      addition to the Landlord's rights and remedies under Subparagraph 14.4 and
      the other provisions of this Lease, Tenant shall indemnify, defend with
      counsel reasonably acceptable to Landlord and hold Landlord harmless from
      all loss or liability including, without limitation, any claims made by
      any succeeding tenant based thereon. The foregoing indemnity shall survive
      the expiration or earlier termination of this Lease.

            11.2 Hold Over. Any holding over after the expiration of the term of
      this Lease, with the consent of Landlord, shall be construed to be a
      tenancy from month to month, cancelable upon thirty (30) days written
      notice, and upon the same terms and conditions as exist during the last
      year of the term hereof except the Annual Basic Rent shall be increased to
      one hundred fifty percent (150%) of the Annual Basic Rent during the last
      year of the term hereof or to fair market value, whichever is greater. Any
      holding over after the expiration of the term of this Lease, without the
      consent of Landlord, shall result in Tenant being a tenant at sufferance,
      in which event Landlord shall have the right to immediately terminate this
      Lease and Tenant shall indemnify, defend and hold Landlord harmless from
      any and all costs, liabilities, obligations, damages and claims resulting
      therefrom.

            ll.3 No Effect on Landlord's Rights. The foregoing provisions of
      this Paragraph 11 are in addition to, and do not affect, Landlord's right
      of re-entry or any other rights of Landlord hereunder or otherwise
      provided by law or equity.

      12. Taxes on Tenant's Property. Tenant shall be liable for, and shall pay
before delinquency, all taxes and assessments (real and personal) levied against
(a) any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Leasehold Improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant) to the extent such items are assessed at a
valuation higher than the valuation at which tenant improvements conforming to
the Building standard tenant improvements set forth in Schedule "1" to Exhibit
"D" are assessed. If any such taxes or assessments are levied against Landlord
or Landlord's property, Landlord may, after written notice to Tenant (and under
proper protest if requested by Tenant) pay such taxes and assessments, and
Tenant shall reimburse Landlord therefore within ten (10) business days after
demand by Landlord; provided, however, Tenant, at its sole cost and expense,
shall have the right, with Landlord's cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes and assessments
so paid under protest.

      13. Condition Of Premises; Repairs.

            13.1 Condition of Premises. Tenant acknowledges that, except as
      otherwise expressly set forth in this Lease, neither Landlord nor any
      agent of Landlord has made any representation or warranty with respect to
      the Premises, the Building, the Site or the Project or their condition, or
      with respect to the suitability thereof for the conduct of Tenant's
      business. The taking of possession of the Premises by Tenant shall
      conclusively establish that the Project, the Site, the Premises, the
      Leasehold Improvements therein, the Building and the Common Areas were at
      such time complete and in good, sanitary and satisfactory condition and
      repair with all work required to be performed by Landlord, if any,
      pursuant to Exhibit "D" completed and

                                       12



      without any obligation on Landlord's part to make any alterations,
      upgrades or improvements thereto, except as provided in Exhibit "D" and
      the repair of any latent defects in the Building or Premises (excluding
      any portion of the Premises constructed by Tenant) disclosed by Tenant and
      specified in written notice to Landlord within ninety (90) days after the
      Commencement Date. Landlord shall cause all latent defects so specified by
      notice from Tenant to be completed and/or repaired as soon as reasonably
      possible after Landlord's receipt thereof.

            13.2 Tenant's Repair Obligations. Except for Landlord's obligations
      specifically set forth in Subparagraphs 13.1,13.3, 20.1 and 21.2 hereof,
      Tenant shall at all times and at Tenant's sole cost and expense, keep,
      maintain, repair and preserve the Premises and all Leasehold Improvements,
      Tenant Changes, and any alterations, additions and property therein in
      first-class condition and repair, reasonable wear and tear excepted. Such
      maintenance and repairs shall be performed with due diligence, lien-free
      and in a first-class workmanlike manner, by such contractor(s) selected by
      Tenant and approved by Landlord, which approval shall not be unreasonably
      withheld or delayed. Except as otherwise expressly provided in this Lease,
      Landlord shall have no obligation to alter, remodel, improve, repair,
      renovate, redecorate or paint all or any part of the Premises.

            13.3 Landlord's Repair Obligations. Notwithstanding the provisions
      of Subparagraph 13.2 above to the contrary, Landlord shall, as part of the
      Operating Expenses, repair and maintain in a good condition (a) the
      Building's shell and other structural portions of the Building (including
      the roof and foundations), (b) the basic plumbing, heating, ventilating,
      air conditioning, sprinkler and electrical systems within the Building's
      core and (c) the Common Areas; provided, however, to the extent such
      maintenance or repairs are required as a result of any act, neglect, fault
      or omission of Tenant or any of Tenant's agents, employees, contractors,
      licensees or invitees, Tenant shall pay to Landlord, as additional rent,
      the costs of such maintenance and repairs.

            13.4 Tenant's Waiver; Self-Help. Tenant waives the right to make
      repairs at Landlord's expense under any law, statute or ordinance now or
      hereafter in effect (including the provisions of California Civil Code
      Section 1942 and any successive sections or statutes of a similar nature).

      14. Alterations.

            14.1 Tenant Changes: Conditions. After installation of the initial
      Leasehold Improvements for the Premises pursuant to Exhibit "D", Tenant
      may, at its sole cost and expense, make alterations, additions,
      improvements and decorations to the Premises (collectively, "Tenant
      Changes") subject to and upon the following terms and conditions:

            (a)   Notwithstanding any provision in this Paragraph 14 to the
contrary, Tenant is absolutely prohibited from making any alterations,
additions, improvements or decorations which: (i) affect any area outside the
Premises; (ii) affect the Building's structure, or detrimentally affect any
equipment or systems, or the proper functioning thereof, or Landlord's access
thereto; (iii) affect the outside appearance, character or use of the Project,
the Building or the Common Areas; (iv) weaken or impair the structural strength
of the Building; (v) in the reasonable opinion of Landlord, lessen the value of
the Project or Building; or (vi) will violate or require a change in any
occupancy certificate applicable to the Premises.

            (b)   Before proceeding with any Tenant Change which is not
otherwise prohibited in Subparagraph 14.1(a) above, Tenant must first obtain
Landlord's written approval thereof (including approval of all plans,
specifications and working drawings for such Tenant Change), which approval
shall not be unreasonably withheld or delayed. However, Landlord's prior
approval shall not be required for any Tenant Change (i) which, when combined
with all of Tenant's other Tenant Changes over a twelve-month period do not, in
the aggregate, cost more than Ten Thousand Dollars ($10,000.00); (ii) provided
that Tenant delivers to Landlord final plans, specifications and working
drawings for such Tenant Change at least ten (10) days prior to commencement of
the work thereof; and (iii) further provided that Tenant and such Tenant Change
otherwise satisfy all other conditions set forth in this Subparagraph 14.1.

                                       13



            (c)   After Landlord has approved the Tenant Changes and the plans,
specifications and working drawings therefore, Tenant shall: (i) enter into an
agreement for the performance of such Tenant Changes with such contractors and
subcontractors selected by Tenant and approved by Landlord, which approval shall
not be unreasonably withheld or delayed; (ii) before proceeding with any Tenant
Change, provide Landlord with ten (10) days' prior written notice thereof; and
(iii) pay to Landlord, within fifteen (15) days after written demand, the costs
of any increased insurance premiums incurred by Landlord to include such Tenant
Changes in the fire and extended coverage insurance obtained by Landlord
pursuant to Paragraph 23 below. However, Landlord shall be required to include
the Tenant Changes under such insurance only to the extent such insurance is
actually obtained by Landlord and such Tenant Changes are insurable under such
insurance; if such Tenant Changes are not or cannot be included in Landlord's
insurance, Tenant shall insure the Tenant Changes under its casualty insurance
pursuant to Subparagraph 22.1(a) below. In addition, before proceeding with any
Tenant Change, Tenant's contractors shall obtain, on behalf of Tenant and at
Tenant's sole cost and expense, all necessary governmental permits and approvals
for the commencement and completion of such Tenant Change.

            (d)   Tenant shall pay to Landlord, as additional rent, the
reasonable costs of Landlord's engineers and other consultants (but not
Landlord's on-site management personnel) for review of all plans,
specifications and working drawings for the Tenant Changes, within fifteen
(15) business days after Tenant's receipt of invoices either from Landlord or
such consultants.

            (e)   All Tenant Changes shall be performed: (i) in accordance with
the approved plans, specifications and working drawings; (ii) lien-free and in a
first-class and workmanlike manner; (iii) in compliance with all laws, rules,
and regulations of all governmental agencies and authorities; (iv) in such a
manner so as not to interfere with the occupancy of any other tenant in the
Project or Building, nor impose any additional expense upon nor delay Landlord
in the maintenance and operation of the Project or Building; and (v) at such
times, in such manner and subject to such rules and regulations as Landlord may
from time to time reasonably designate.

            (f)   Throughout the performance of the Tenant Changes, Tenant shall
obtain, or cause its contractors to obtain, workers compensation insurance and
general liability insurance in compliance with the provisions of Paragraph 22 of
this Lease.

            14.2 Removal of Tenant Changes and Leasehold Improvements. All
      Tenant Changes and the initial Leasehold Improvements in the Premises
      (whether installed or paid for by Landlord or Tenant), shall become the
      property of Landlord and shall remain upon and be surrendered with the
      Premises at the end of the Term of this Lease. Landlord's, consent to the
      initial Leasehold Improvements shall relieve Tenant of any obligation to
      remove such Leasehold Improvements at the expiration or sooner termination
      of this Lease, unless, at the time Landlord consents to such Leasehold
      Improvements, Landlord indicates that it will require removal of such
      Leasehold Improvements on the expiration or sooner termination of this
      Lease. If Tenant so desires, Tenant may, prior to making any Tenant
      Changes (regardless of whether Landlord's consent to such Tenant Changes
      is required), request Landlord to notify Tenant, in writing, within ten
      (10) days following receipt of Tenant's request, as to whether Landlord
      will require the removal of such Tenant Changes and restoration of the
      Premises to the condition which existed prior to the performance of any
      such Tenant Changes. If Landlord fails to respond to Tenant's request, in
      writing, within such ten (10) day period, Landlord shall be deemed to have
      elected to require that such Tenant Changes not be removed and the
      Premises restored as of the expiration or sooner termination of the Term
      of this Lease. If Landlord requires Tenant to remove any such items as
      described above, Tenant shall, at its sole cost, remove the identified
      items on or before the expiration or sooner termination of this Lease and
      repair any damage to the Premises caused by such removal (or, at
      Landlord's option, shall pay to Landlord all of Landlord's costs of such
      removal and repair).

                                       14



            14.3 Removal of Personal Property. All articles of personal property
      owned by Tenant or installed by Tenant at its expense in the Premises
      (including business and trade fixtures, furniture and movable partitions)
      shall be, and remain, the property of Tenant, and shall be removed by
      Tenant from the Premises, at Tenant's sole cost and expense, on or before
      the expiration or sooner termination of this Lease. Tenant shall repair
      any damage caused by such removal.

            14.4 Tenant's Failure to Remove. If Tenant fails to remove by the
      expiration or sooner termination of this Lease substantially all of its
      personal property, or any items of Leasehold Improvements or Tenant
      Changes identified by Landlord for removal pursuant to Subparagraph 14.2
      above, Landlord may, after Tenant's continued failure after ten (10) days
      written notice to Tenant, and at its option, treat such failure as a hold
      over pursuant to Subparagraph 11.2 above, and/or may (without liability to
      Tenant for loss thereof), at Tenant's sole cost and in addition to
      Landlord's other rights and remedies under this Lease, at law or in
      equity: (a) remove and store such items; and/or (b) upon an additional ten
      (10) days' prior notice to Tenant, sell all or any such items at private
      or public sale for such price as Landlord may obtain. Landlord shall apply
      the proceeds of any such sale to any amounts due to Landlord under this
      Lease from Tenant (including Landlord's attorneys' fees and other costs
      incurred in the removal, storage and/or sale of such items), with any
      remainder to be paid to Tenant.

      15. Liens. Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project, the Site, the Building
or the Premises, nor against Tenant's leasehold interest in the Premises, by
reason of or in connection with any repairs, alterations, improvements or other
work contracted for or undertaken by Tenant or any other act or omission of
Tenant or Tenant's agents, employees, contractors, licensees or invitees. Tenant
shall, at Landlord's request, provide Landlord with enforceable, conditional and
final lien releases (and other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded so that it no longer affects title to
the Project, the Site, the Building or the Premises. If Tenant fails to cause
such lien to be so released or bonded within ten (10) days after filing thereof,
such failure shall be deemed a material breach by Tenant under this Lease, and
Landlord may, without waiving its rights and remedies based on such breach, and
without releasing Tenant from any of its obligations, cause such lien to be
released by any means it shall deem proper, including payment in satisfaction of
the claim giving rise to such lien. Tenant shall pay to Landlord within fifteen
(15) days after receipt of invoice from Landlord, any sum paid by Landlord to
remove such liens, together with interest at the Interest Rate from the date of
such payment by Landlord.

      16. Assignment and Subletting.

            16.1 General. Assignment or encumbrance of all or any part of this
      Lease, and any sublease of all or any part of the Premises, shall only be
      permitted, in conformance with the provisions of this Paragraph 16.

            16.2 Restriction on Transfer. Subject to the provisions of
      Subparagraphs 16.3, 16.4, 16.5 and 16.6, Tenant shall not, without the
      prior written consent of Landlord, assign or encumber this Lease or any
      interest herein or sublet the Premises or any part thereof, or permit the
      use or occupancy of the Premises by any party other than Tenant (any such
      assignment, encumbrance, sublease or the like shall sometimes be referred
      to as a "Transfer"). Any Transfer without Landlord's consent (except for a
      Transfer pursuant to Subparagraph 16.6 below) shall constitute a default
      by Tenant under this Lease, and in addition to all of Landlord's other
      remedies at law, in equity or under this Lease, such Transfer shall be
      voidable at Landlord's election. For purposes of this Paragraph 16, if
      Tenant is a corporation, partnership or other entity, any transfer,
      assignment, encumbrance or hypothecation of twenty-five percent (25%) or
      more (individually or in the aggregate) of any stock or other ownership
      interest in such entity, and/or any transfer, assignment, hypothecation or
      encumbrance of any

                                       15



      controlling ownership or voting interest in such entity shall be deemed an
      assignment of this Lease and shall be subject to all of the restrictions
      and provisions contained in this Paragraph 16; unless Tenant (i) notifies
      Landlord of such Transfer, (ii) demonstrates to Landlord's reasonable
      satisfaction that such Transfer does not constitute a change in control of
      Tenant, and (iii) promptly supplies Landlord with any documents or
      information reasonably requested by Landlord regarding such Transfer
      and/or transferee. The immediately preceding sentence shall not apply to
      any transfers of stock of Tenant if Tenant is a publicly-held corporation
      and such stock is transferred publicly over a recognized security exchange
      or over-the-counter market or as a part of going public Tenant transfers
      25% or more, provided that no new stockholder acquires more than 25% stock
      ownership, unless such ownership acquisition does not constitute, in
      Landlord's reasonable discretion, a change in control of Tenant. However,
      notwithstanding the prior sentence to the contrary, Tenant shall be able
      to conclusively prove to Landlord that no change in control has occurred
      by showing that a preexisting shareholder held and continues to hold an
      ownership interest in Tenant that is greater than the shareholder
      acquiring a new 25% interest in Tenant and that through such ownership
      such existing shareholder possesses the power to control Tenant. For
      purposes of this Section, the term "control" (including "controls",
      "controlled by" and "under common control with" shall mean the power,
      whether direct or indirect, to direct or cause the direction of the
      management and policies of the Tenant.

            16.3 Landlord's Options. If at any time or from time to time during
      the Term Tenant desires to effect a Transfer, Tenant shall deliver to
      Landlord written notice ("Transfer Notice") setting forth the terms and
      provisions of the proposed Transfer and the identity of the proposed
      assignee, sublessee or other transferee (sometimes referred to hereinafter
      as a "Transferee"). Tenant shall also deliver to Landlord with the
      Transfer Notice, a current financial statement and financial statements
      for the preceding two (2) years of the Transferee which have been
      certified or audited by an independent accounting firm, and such other
      information concerning the business background and financial condition of
      the proposed Transferee as Landlord may reasonably request. Landlord shall
      have the option, exercisable by written notice delivered to Tenant within
      ten (10) days after Landlord's receipt of the Transfer Notice, such
      financial statements and other information, either to approve or
      disapprove such Transfer, which approval shall not be unreasonably
      withheld.

            16.4 Additional Conditions; Excess Rent. If Landlord approves of the
      proposed Transfer pursuant to Subparagraph 16.3 above, Tenant may enter
      into the proposed Transfer with such proposed Transferee subject to the
      following further conditions:

            (a)   the Transfer shall be on the same terms set forth in the
Transfer Notice delivered to Landlord (if the terms have changed, Tenant must
submit a revised Transfer Notice to Landlord and Landlord shall have another ten
(10) days after receipt thereof to make the election in Subparagraph 16.3);

            (b)   no Transfer shall be valid and no Transferee shall take
possession of the Premises until an executed counterpart of the assignment,
sublease or other instrument affecting the Transfer has been delivered to
Landlord pursuant to which the Transferee shall expressly assume all of Tenant's
obligations under this Lease (or with respect to a sublease of a portion of the
Premises or for a portion of the Term, all of Tenant's obligations applicable to
such portion);

            (c)   no Transferee shall have a further right to assign, encumber
or sublet, except on the terms herein contained; and

            (d)   fifty percent (50%) of the amount by which any rent or other
economic consideration received by Tenant as a result of such Transfer exceeds,
in the aggregate, the total rent which Tenant is obligated to pay Landlord under
this Lease (prorated to reflect obligations allocable to any portion of the
Premises subleased).

            16.5 Reasonable Disapproval. Landlord and Tenant hereby acknowledge
      that Landlord's disapproval of any proposed Transfer pursuant to
      Subparagraph 16.3 shall

                                       16



      be deemed reasonably withheld if based upon any reasonable factor,
      including, without limitation, any or all of the following factors: (a)
      the proposed Transfer would result in more than two (2) subleases of
      portions of the Premises being in effect at any one time during the Term;
      (b) the proposed Transferee is an existing tenant of the Project or is
      presently negotiating with Landlord (unless Landlord cannot accommodate
      the space requirement of the proposed Transferee within a reasonable time
      frame) for space in the Project; (c) the proposed Transferee is a
      governmental entity; (d) the use of the Premises by the Transferee (i) is
      not permitted by the use provisions in Paragraph 8 hereof, or (ii)
      violates any exclusive use granted by Landlord to another tenant in the
      Project; (e) the Transfer would likely result in a significant increase in
      the use of the parking areas or Common Areas by the Transferee's employees
      or visitors, and/or significantly increase the demand upon utilities and
      services to be provided by Landlord to the Premises; (f) the Transferee
      does not have the financial capability to fulfill the obligations imposed
      by the Transfer; (g) the Transferee is not in Landlord's reasonable
      opinion of reputable or good character or consistent with Landlord's
      reasonably desired tenant mix; or (h) the Transferee is a real estate
      developer or is acting directly or indirectly on behalf of a real estate
      developer.

            16.6 Permitted Transfers. Tenant may assign this Lease or sublet the
      Premises or any portion thereof, without paying any fees to or splitting
      any amounts received with Landlord, without Landlord's consent to any
      corporation or other entity which controls, is controlled by or is under
      common control with Tenant, or to any corporation or other entity
      resulting from a merger or consolidation with Tenant, or to any person or
      entity which acquires all of the assets of Tenant's business as a going
      concern (collectively, "Permitted Transfers"), provided that: (a) if an
      assignment, the assignee assumes, in full, the obligations of Tenant under
      this Lease (or if a sublease, the sublessee of a portion of the Premises
      or Term assumes, in full, the obligations of Tenant with respect to such
      portion); (b) Tenant remains fully liable under this Lease; (c) the use of
      the Premises under Paragraph 8 of this Lease remains unchanged; and (d)
      such transaction is not entered into as a subterfuge to avoid the
      restrictions and provisions of this Paragraph 16.

            16.7 No Release. No Transfer shall release Tenant of Tenant's
      obligations under this Lease or alter the primary liability of Tenant to
      pay the rent and to perform all other obligations to be performed by
      Tenant hereunder. Landlord may require that any Transferee remit directly
      to Landlord on a monthly basis, all monies due Tenant by said Transferee.

            However, the acceptance of rent by Landlord from any other person
shall not be deemed to be a waiver by Landlord of any provision hereof. Consent
by Landlord to one Transfer shall not be deemed consent to any subsequent
Transfer. In the event of default by any Transferee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such Transferee or successor.

            16.8 Administrative and Attorneys' Fees. If Tenant requests the
      consent of Landlord to any Transfer, then Tenant shall, upon demand, pay
      Landlord a non-refundable administrative fee of Five Hundred Dollars
      ($500.00). Acceptance of the administrative fee shall in no event obligate
      Landlord to consent to any proposed Transfer.

      17. Entry by Landlord. Landlord and its employees and agents shall at all
times have the right to enter the Premises to inspect the same, to supply
janitorial service and any other service required to be provided by Landlord to
Tenant under this Lease,) to exhibit the Premises to prospective lenders or
purchasers (or during the last year of the Term, to prospective tenants), to
post notices of non-responsibility, and/or to alter, improve or repair the
Premises or any other portion of the Building or Project, all without being
deemed guilty of or liable for any breach of Landlord's covenant of quiet
enjoyment or any eviction of Tenant, and without abatement of rent, provided
such entry by Landlord or its employees and agents is reasonable in manner and
duration. Landlord shall provide Tenant with reasonable notice prior to any
entry into the

                                       17



Premises for purposes of inspection, exhibition, posting notices or making
alterations, but no prior notice shall be required for any entry for providing
janitorial services, relamping, recurring maintenance work or responding to
emergencies. In exercising such entry rights, Landlord shall endeavor to
minimize, as reasonably practicable, the interference with Tenant's business,
and shall provide Tenant with reasonable advance written notice of such entry
(except in emergency situations). For each of the foregoing purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults and safes, and
Landlord shall have the means which Landlord may deem proper to open said doors
in an emergency in order to obtain entry to the Premises. Any entry to the
Premises obtained by Landlord by any of said means or otherwise shall not under
any circumstances be construed or deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an eviction of Tenant from the Premises
or any portion thereof, or grounds for any abatement or reduction of rent,
provided that Landlord reasonably entered the Premises for a permitted purpose.
Any repairs to the Premises necessitated on account of any such entry by
Landlord shall be Landlord's responsibility, unless such repairs result from
Tenant's failure to provide Landlord with properly labeled keys for the
Premises. Nothing in this Paragraph 17 shall be construed as obligating Landlord
to perform any repairs, alterations or decorations, except as otherwise
expressly required in this Lease to be performed by Landlord.

      18. Utilities and Services.

            18.1 Standard Utilities and Services. Subject to the terms and
      conditions of this Lease, and the obligations of Tenant as set forth
      herein below, Landlord shall furnish or cause to be furnished to the
      Premises the following utilities and services in a manner consistent with
      other comparable Class A quality office buildings located in South Orange
      County, the costs of which shall be included in Operating Expenses, unless
      otherwise specified below (Landlord reserves the right to adopt
      non-discriminatory modifications and additions to the following provisions
      from time to time so long as such modifications do not materially decrease
      the level of service provided to Tenant):

            (a)   Landlord shall make available for Tenant's non-exclusive use,
the non-attended passenger elevator facilities of the Building, seven days per
week, 24 hours per day. Tenant shall have access to the Premises seven (7) days
per week, 24 hours per day.

            (b)   Landlord shall furnish during "Business Hours" heating,
ventilation and air conditioning ("HVAC") for the Premises as required in
Landlord's judgment for the comfortable and normal occupancy of the Premises.
For purposes of this Subparagraph 18.1, the "Business Hours" shall mean 7:00
a.m. to 6:00 p.m. on Monday through Friday and 8:00 a.m. to 1PM on Saturday
(except holidays). The cost of maintenance and service calls to adjust and
regulate the HVAC system shall be charged to Tenant if the need for maintenance
work results from either Tenant's adjustment of room thermostats or Tenant's
failure to comply with its obligations under this Paragraph 18. Such work shall
be charged at hourly rates equal to then-current journeyman's wages for HVAC
mechanics. If Tenant desires HVAC at any time other than during Business Hours,
Landlord shall provide such "after-hours" usage after twenty-four (24) hours
advance request by Tenant, and Tenant shall pay to Landlord, as additional rent
(and not as part of the Operating Expenses) the actual cost on an average hourly
basis (including Landlord's reasonable administrative costs of fifteen percent
(15%) of such actual costs, which shall be excluded from Operating Expenses), as
reasonably and fairly determined by Landlord from time to time, of such
after-hours usage. Landlord agrees that it shall use reasonable efforts to
accommodate Tenant's requests for after-hours HVAC service on less than
twenty-four (24) hours prior notice whenever possible.

            (c)   Landlord shall furnish to the Premises 24 hours per day,
reasonable quantities of electric current for fluorescent and incandescent
lighting, and task ambient lighting and for normal office equipment in
quantities and intensity of use which is customary and reasonable for normal
office tenants (collectively "Customary Uses"). Landlord shall have the right to
require that any raised-floor computer facility portions of the Premises, any
uninterrupted power supply circuits and any other circuits serving computers,
equipment or facilities which are not Customary Uses (collectively, "Separately
Metered Portions") shall be separately metered, and that the charges for all
such separately metered electrical consumption be paid by Tenant

                                       18



either directly to the utility company, or to Landlord, as Landlord elects,
which charges shall be excluded from Operating Expenses. In no event shall
Tenant's use of electric current ever exceed the capacity of the feeders to the
Building or the risers or wiring installation of the Building. Landlord shall
also furnish hot and cold water to the Premises 24 hours per day for drinking
and lavatory purposes, in such quantities as required in Landlord's reasonable
judgment for the comfortable and normal use of the Premises. If Tenant requires
or consumes water in excess of what is considered reasonable or normal by
Landlord, Landlord may require Tenant to pay to Landlord, as additional rent,
the cost as fairly determined by Landlord incurred for such excess usage.

            (d)   Landlord shall furnish bonded janitorial services to the
Premises five (5) days per week pursuant to janitorial and cleaning
specifications as may be adopted by Landlord from time to time, which standards
shall be consistent with the standards typical for comparable Class A quality
office buildings located in the South Orange County area. No person(s) other
than those persons approved by Landlord shall be permitted to enter the Premises
for such purposes. Janitor service shall include ordinary dusting and cleaning
by the janitor assigned to do such work and shall not include cleaning of
carpets or rugs, except normal vacuuming, or moving of furniture, interior
window cleaning, and other special services. Such additional services may be
rendered by Landlord pursuant to written agreement with Tenant as to the extent
of such services and the payment of the cost thereof. Janitor service will not
be furnished on nights when rooms are occupied after 7:30 p.m. or to rooms which
are locked unless a key is furnished to Landlord for use by the janitorial
contractor. Window cleaning shall be done only by Landlord, at such time and
frequency as reasonably determined by Landlord. Tenant shall pay to Landlord the
cost of removal of any of Tenant's refuse and rubbish to the extent that the
same exceeds the refuse and rubbish usually attendant upon the use of the
Premises as offices.

            (e)   Landlord may provide security service or protection in the
Building, in a manner consistent with other comparable Class A quality office
buildings located in the South Orange County office market from the Commencement
Date through the Term.

            (f)   At Landlord's option, and subject to the provisions of
Subparagraph 18.1(c), above, Landlord may install water, electricity and/or HVAC
meters in the Premises to measure Tenant's consumption of such utilities,
including any after-hours and extraordinary usage described above.

            18.2 Tenant's Obligations. Tenant shall cooperate fully at all times
      with Landlord, and abide by all reasonable and non-discriminatory
      regulations and requirements which Landlord may prescribe for the proper
      functioning and protection of the Building's services and systems. Tenant
      shall not use any apparatus or device in, upon or about the Premises which
      may in any way increase the amount of services or utilities usually
      furnished or supplied to the Premises or other premises in the Building.
      In addition, Tenant shall not connect any conduit, pipe, apparatus or
      other device to the Building's water, waste or other supply lines or
      systems for any purpose without first obtaining Landlord's written
      consent. Neither Tenant nor its employees, agents, contractors, licensees
      or invitees shall at any time enter, adjust, tamper with, touch or
      otherwise in any manner affect the mechanical installations or facilities
      of the Building.

            18.3 Failure to Provide Utilities. Landlord's failure to furnish any
      of the utilities and services described in Subparagraph 18.1 above when
      such failure is caused by all or any of the following shall not result in
      any liability of Landlord, except as otherwise set forth in this Lease:
      (a) accident, breakage or repairs; (b) strikes, lockouts or other labor
      disturbances or labor disputes of any such character; (c) governmental
      regulation, moratorium or other governmental action; (d) inability to
      obtain electricity, water or fuel; or (e) any other cause beyond
      Landlord's reasonable control. In addition, in the event of the failure of
      any said utilities or services, Tenant shall not be entitled to any
      abatement or reduction of rent (except as expressly provided in
      Subparagraphs 20.3 and 21.2 if such failure is a result of a damage or
      taking described therein), except as otherwise set forth in this Lease, no
      eviction of

                                       19



      Tenant shall result, and Tenant shall not be relieved from the performance
      of any covenant or agreement in this Lease.

      19. Indemnification and Exculpation.

            19.1 Tenant's Indemnification of Landlord. Tenant shall be liable
      for, and shall indemnify, defend and hold Landlord and Landlord's
      partners, officers, directors, employees, agents, successors and assigns
      (collectively, "Landlord Indemnified Parties") harmless from and against,
      any and all claims, damages, judgments, suits, causes of action, losses,
      liabilities and expenses, including attorneys' fees and court costs
      (collectively, "Indemnified Claims"), arising or resulting from (a) any
      negligent act or negligent omission of Tenant or any of Tenant's agents,
      employees, contractors, subtenants, assignees, licensees or invitees
      (collectively, "Tenant Parties"); (b) the use of the Premises and Common
      Areas and conduct of Tenant's business by Tenant or any Tenant Parties, or
      any other activity, work or thing done, permitted or suffered by Tenant
      or any Tenant Parties, in or about the Premises, the Building or elsewhere
      on the Site; and/or (c) any default by Tenant of any obligations on
      Tenant's part to be performed under the terms of this Lease. In case any
      action or proceeding is brought against Landlord or any Landlord
      Indemnified Parties by reason of any such Indemnified Claims, Tenant, upon
      notice from Landlord, shall defend the same at Tenant's expense by counsel
      approved in writing by Landlord, which approval shall not be unreasonably
      withheld.

            19.2 Landlord's Indemnification. Subject to the limitation on
      Landlord's liability set forth in Paragraph 34 below, Landlord shall be
      liable for, and shall indemnify, defend and hold Tenant and Tenant's
      partners, officers, directors, employees, agents, successors and assigns
      (collectively, "Tenant Indemnified Parties") harmless from and against,
      any injury to persons or damage to property located on the Premises or
      Site to the extent such damage or injury arises or results from (a) the
      gross negligence or willful misconduct of Landlord, its agents or
      employees and/or (b) the default by Landlord of any obligations on
      Landlord's part to be performed under the terms of this Lease; provided,
      however, that Landlord's indemnity shall not apply or extend to any such
      damage or injury which is covered by any insurance maintained by Tenant
      or any Tenant Indemnified Parties (or would have been covered had Tenant
      obtained the insurance as required under this Lease). In case any action
      or proceeding is brought against Tenant or any Tenant Indemnified Parties
      by reason of any such injury or damage indemnified by Landlord as set
      forth hereinabove, Landlord, upon notice from Tenant, shall defend the
      same at Landlord's expense by counsel approved in writing by Tenant, which
      approval shall not be unreasonably withheld.

            19.3 Survival; No Release of Insurers. Tenant's and Landlord's
      indemnification obligations under Subparagraphs 19.1 and 19.2,
      respectively, shall survive the expiration or earlier termination of this
      Lease. Tenant's covenants, agreements and indemnification in Subparagraph
      19.1 above, and Landlord's covenants, agreements and indemnification in
      Subparagraph 19.2 above, are not intended to and shall not relieve any
      insurance carrier of its obligations under policies required to be
      carried by Landlord or Tenant, respectively, pursuant to the provisions
      of this Lease.

      20. Damage or Destruction..

            20.1 Landlord's Rights and Obligations. In the event the Premises or
      any part of the Building is damaged by fire or other casualty to an extent
      not exceeding twenty-five percent (25%) of the full replacement cost
      thereof, and Landlord's contractor reasonably estimates in a writing
      delivered to the parties that the damage thereto is such that the Building
      and/or Premises may be repaired, reconstructed (or restored to
      substantially its condition immediately prior to such damage within one
      hundred fifty (150) days from the date of such casualty, and Landlord will
      or would receive insurance proceeds sufficient to cover the costs of such
      repairs, reconstruction and restoration had Landlord carried the insurance
      required to be carried by Landlord

                                       20



      pursuant to this Lease (including proceeds from Tenant and/or Tenant's
      insurance which Tenant is required to deliver to Landlord pursuant to
      Subparagraph 20.2 below), or should Landlord be a self-insurer for such
      casualty and such casualty would have been covered by the insurance
      required under this Lease had Landlord not elected to self-insure for such
      risk, then Landlord shall commence and proceed diligently with the work of
      repair, reconstruction and restoration and this Lease shall continue in
      full force and effect. If, however, the Premises or any other part(s) of
      such Building is damaged to an extent exceeding twenty-five percent (25%)
      of the full replacement cost thereof, or Landlord's contractor reasonably
      estimates that such work of repair, reconstruction and restoration will
      require longer than one hundred fifty (150) days to complete, or Landlord
      will not receive insurance proceeds even though Landlord carried the
      insurance required to be carried by Landlord pursuant to this Lease
      (and/or proceeds from Tenant, as applicable) sufficient to cover the costs
      of such repairs, reconstruction and restoration, then Landlord may elect
      to either: (a) repair, reconstruct and restore the portion of the Building
      and Premises damaged by such casualty (including the Leasehold
      Improvements and any Tenant Changes insured by Landlord pursuant to
      Subparagraph 14.1(c)), in which case this Lease shall continue in full
      force and effect; or (b) terminate this Lease effective as of the date
      which is thirty (30) days after Tenant's receipt of Landlord's election to
      so terminate.

            20.2 Tenant's Costs and Insurance Proceeds. In the event of any
      damage or destruction of all or any part of the Premises, Tenant shall
      immediately: (a) notify Landlord thereof; and (b) deliver to Landlord all
      insurance proceeds received by Tenant with respect to the Leasehold
      Improvements in the Premises but only to the extent that such items are
      not covered by Landlord's casualty insurance obtained by Landlord pursuant
      to Paragraph 23 below (excluding proceeds for Tenant's furniture and other
      personal property), whether or not this Lease is terminated as permitted
      in this Paragraph 20, and Tenant hereby assigns to Landlord all rights to
      receive such insurance proceeds.

            If, for any reason (including Tenant's failure to obtain insurance
for the full replacement cost of any Tenant Changes which Tenant is required to
insure pursuant to Subparagraphs 14.1(c) and/or 22.1 (a) hereof), Tenant fails
to receive insurance proceeds covering the full replacement cost of such Tenant
Changes which are damaged, Tenant shall be deemed to have self-insured the
replacement cost of such Tenant Changes, and upon any damage or destruction
thereto, Tenant shall immediately pay to Landlord the full replacement cost of
such items, less any insurance proceeds actually received by Landlord from
Landlord's or Tenant's insurance with respect to such items, but only to the
extent that Landlord is required to or elects to reconstruct the same for
Tenant's use as provided in this Lease.

            20.3 Abatement of Rent. In the event that as a result of any such
      damage, repair, reconstruction and/or restoration of the Premises or the
      Building, Tenant is prevented from using, and does not use, the Premises
      or any portion thereof for ten (10) consecutive business days (the
      "Eligibility Period"), then the rent shall be abated or reduced, as the
      case may be, during the period that Tenant continues to be so prevented
      from using and does not use the Premises or portion thereof, in the
      proportion that the Rentable Square Feet of the portion of the Premises
      that Tenant is prevented from using, and does not use, bears to the total
      Rentable Square Feet of the Premises. Notwithstanding the foregoing to the
      contrary, if the damage is due to the negligence or willful misconduct of
      Tenant or any Tenant Parties, there shall be no abatement of rent.

            20.4 Inability to Complete. Notwithstanding anything to the contrary
      contained in this Paragraph 20, in the event Landlord is obligated or
      elects to repair, reconstruct and/or restore the damaged portion of the
      Building or Premises pursuant to Subparagraph 20.1 above, but is delayed
      from completing such repair, reconstruction and/or restoration beyond the
      date which is six (6) months after the date estimated by Landlord's
      contractor for completion thereof pursuant to Subparagraph 20.1, by reason
      of any causes beyond the reasonable control of Landlord (including,
      without limitation, any acts of God, war, governmental restrictions, and
      delays caused by

                                       21



      Tenant or any Tenant Parties), then Landlord or Tenant may elect to
      terminate this Lease upon thirty (30) days' prior written notice to the
      other party.

            20.5 Damage Near End of Term. In addition to its termination rights
      in Subparagraphs 20.1 and 20.4 above, Landlord and Tenant shall have the
      right to terminate this Lease if any damage to the Building or Premises
      occurs during the last twelve (12) months of the Term of this Lease and
      Landlord's contractor estimates in a writing delivered to the parties that
      the repair, reconstruction or restoration of such damage cannot be
      completed within the earlier of (a) the scheduled expiration date of the
      Lease Term, or (b) sixty (60) days after the date of such casualty.

            20.6 Tenant's Termination Right. Upon the occurrence of any damage
      or destruction to the Building which materially affects Tenant's ability
      to use the Premises, Landlord shall provide to Tenant a written notice of
      Landlord's contractor's reasonable estimate of the time required to
      complete the repair and restoration of such damage or destruction (the
      "Time Estimate"). If the Time Estimate estimates that such repair and
      restoration will take more than three hundred (300) days to complete
      (measured from the date of occurrence of such damage or destruction)
      Tenant may elect to terminate this Lease upon written notice to Landlord,
      which notice shall be given, if at all, within twenty (20) days following
      Tenant's receipt of the Time Estimate. If Tenant fails to deliver notice
      of Tenant's election to terminate this Lease to Landlord within such
      twenty (20) day period, Tenant shall not have any right to terminate this
      Lease as a result of such damage or destruction. Once such notice has been
      delivered, if this Lease is not terminated thereby, as long as Landlord
      has not elected to terminate as otherwise allowed by the above provisions
      of this Paragraph 20, Landlord shall proceed to undertake its repair and
      restoration obligations under this Paragraph 20 and Tenant shall not have
      the right to terminate this Lease as a result of the occurrence of such
      damage or destruction, and Landlord agrees to use diligent efforts to
      complete the restoration work in a timely manner.

            20.7 Waiver of Other Termination Rights. The provisions of
      California Civil Code Section 1932, Subsection 2, and Section 1933,
      Subsection 4 (and any successor statutes thereof permitting Tenant to
      terminate this Lease as a result of any damage or destruction) are hereby
      expressly waived by Tenant, and Tenant's only termination rights relating
      to damage to or destruction of the Premises shall be as set forth in
      Subparagraph 20.4, 20.5 and 20.6, above.

      21. Eminent Domain.

            21.1 Substantial Taking. Subject to the provisions of Subparagraph
      21.4 below, in case the whole of the Premises, or such part thereof as
      shall substantially interfere with Tenant's use and occupancy of the
      Premises as reasonably determined by Landlord, shall be taken for any
      public or quasi-public purpose by any lawful power or authority by
      exercise of the right of appropriation, condemnation or eminent domain, or
      sold to prevent such taking, either party shall have the right to
      terminate this Lease effective as of the date possession is required to be
      surrendered to said authority.

            21.2 Partial Taking; Abatement of Rent. In the event of a taking of
      a portion of the Premises which does not substantially interfere with the
      conduct of Tenant's business, then, except as otherwise provided in the
      immediately following sentence, neither party shall have the right to
      terminate this Lease and Landlord shall thereafter proceed to make a
      functional unit of the remaining portion of the Premises (but only to the
      extent Landlord receives proceeds therefore from the condemning
      authority), and rent shall be abated with respect to the part of the
      Premises which Tenant shall be so deprived on account of such taking.

            21.3 Condemnation Award. Subject to the provisions of Subparagraph
      21.4 below, in connection with any taking of the Premises or Building,
      Landlord shall be entitled to receive the entire amount of any award which
      may be made or given in such taking or condemnation. Tenant shall not
      assert any claim against Landlord or the

                                       22



      taking authority for any compensation because of such taking (including
      any claim for bonus or excess value of this Lease); provided, however, if
      any portion of the Premises is taken, Tenant shall be granted the right to
      recover from the condemning authority (but not from Landlord) any
      compensation as may be separately awarded or recoverable by Tenant for the
      taking of Tenant's furniture, fixtures, equipment and other personal
      property within the Premises, for Tenant's relocation expenses, and for
      any loss of goodwill or other damage to Tenant's business by reason of
      such taking, and for any Leasehold Improvements and Tenant Changes which
      remain Tenant's property as of the expiration or sooner termination of
      this Lease (if any).

            21.4 Temporary Taking. In the event of a taking of the Premises or
      any part thereof for temporary use, (a) this Lease shall be and remain
      unaffected thereby and rent shall not abate, and (b) Tenant shall be
      entitled to receive for itself such portion or portions of any award made
      for such use with respect to the period of the taking which is within the
      Term. For purpose of this Subparagraph 21.4, a temporary taking shall be
      defined as a taking for a period of two hundred seventy (270) days or
      less.

      22. Tenant's Insurance.

            22.1 Types of Insurance. On or before the earlier of the
      Commencement Date or the date Tenant commences or causes to be commenced
      any work of any type in or on the Premises pursuant to this Lease, and
      continuing during the entire Term, Tenant shall obtain and keep in full
      force and effect, the following insurance in connection with Tenant's use
      or occupancy of the Site and the Premises:

            (a)   All Risk insurance, including fire and extended coverage,
sprinkler leakage (including earthquake sprinkler leakage), vandalism, malicious
mischief upon property of every description and kind owned by Tenant and located
in the Premises or Building, or for which Tenant is legally liable or installed
by or on behalf of Tenant including, without limitation, furniture, equipment
and any other personal property, and the Tenant Changes to the extent required
under Subparagraph 14.1(c) above, (but excluding the initial Leasehold
Improvements previously existing or installed in the Premises), in an amount not
less then the full replacement cost thereof. In the event that there shall be a
dispute as to the amount which comprises full replacement cost, the decision of
Tenant's insurer shall govern.

            (b)   Commercial general liability insurance coverage, insuring
Tenant's activities at or otherwise affecting the Project, including personal
injury, bodily injury (including wrongful death), broad form property damage,
operations hazard, owner's protective coverage, contractual liability (including
Tenant's indemnification obligations under this Lease, including Paragraph 19
hereof), and owned/non-owned auto liability, with initial limits as follows:
general aggregate-not less than Two Million Dollars ($2,000,000.00), and per
occurrence-not less than Two Million Dollars ($2,000,000.00). The limits of
liability of such commercial general liability insurance shall be increased, if
adjusted at all, every five (5) years during the Term of this Lease to an amount
reasonably required by Landlord.

            (c)   Business Income insurance in such amount as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent tenants or attributable to prevention of
access to the Premises, Tenant's parking areas or to the Building as a result of
such perils.

            22.2 Requirements. Each policy required to be obtained by Tenant
      hereunder shall: (a) be issued by insurers authorized to do business in
      the state in which the Building is located and rated not less than
      financial class X, and not less than policyholder rating A- in the most
      recent version of Best's Key Rating Guide; (b) be in form reasonably
      satisfactory from time to time to Landlord; (c) name Tenant as named
      insured thereunder and name Landlord and, at Landlord's request,
      Landlord's mortgagees and ground lessors of which Tenant has been informed
      in writing, as additional insureds thereunder, all as their respective
      interests may appear; (d) not have a deductible amount exceeding
      Twenty-five Thousand Dollars ($25,000.00); (e) specifically provide that
      the insurance afforded by such policy for the benefit of Landlord and
      Landlord's mortgagees and ground lessors shall be primary, and any

                                       23



      insurance carried by Landlord or Landlord's mortgagees and ground lessors
      shall be excess and non-contributing; (f) except for worker's compensation
      insurance, contain an endorsement that the insurer waives its right to
      subrogation as described in Paragraph 24 below; and (g) contain an
      undertaking by the insurer to notify Landlord (and the mortgagees and
      ground lessors of Landlord who are named as additional insureds) in
      writing not less than thirty (30) days prior to any material change,
      reduction in coverage, cancellation or other termination thereof. Tenant
      agrees to deliver to Landlord, as soon as practicable after the placing of
      the required insurance, but in no event later than ten (10) days after the
      date Tenant takes possession of all or any part of the Premises, certified
      copies of each such insurance policy (or certificates from the insurance
      company evidencing the existence of such insurance and Tenant's compliance
      with the foregoing provisions of this Paragraph 22). Tenant shall cause
      replacement policies or certificates to be delivered to Landlord prior to
      the expiration of any such policy or policies, or within five (5) business
      days following the expiration of any such policy or policies if not
      available until then. If any such initial or replacement policies or
      certificates are not furnished within the time(s) specified herein,
      Tenant, subject to Subparagraph 22.3, below, shall be deemed to have
      self-insured for same. If Tenant does not furnish the required policy(ies)
      and does not satisfy the requirements imposed by Subparagraph 22.3, Tenant
      shall be deemed to be in material default under this Lease, and Landlord
      shall have the right, but not the obligation, to procure such policies and
      certificates at Tenant's expense.

      23. Landlord's Insurance. During the Term, Landlord shall be required to
insure the Building, the Premises, the Leasehold Improvements initially
installed in the Premises pursuant to Exhibit "D" and certain Tenant Changes to
the extent described in Subparagraph 14.1(c) above (excluding, however, Tenant's
furniture, equipment and other personal property and those Tenant Changes which
Tenant is obligated to insure pursuant to the provisions of Subparagraphs
14.1(c) and 22.1(a) above) against damage by fire and standard extended
coverage perils and general liability insurance, in such reasonable amounts and
with such reasonable deductibles as are customarily carried by landlords of
comparable Class A quality office buildings located in the South Orange County
office market. At Landlord's option, such insurance may be carried under any
blanket or umbrella policies which Landlord has in force for other buildings and
projects. Landlord may, but shall not be obligated to, carry any other form or
forms of insurance as Landlord or the mortgagees or ground lessors of Landlord
may reasonably determine is advisable, including rental interruption insurance
to the extent commercially reasonable. The cost of insurance obtained by
Landlord pursuant to this Paragraph 23 shall be included in Operating Expenses.
With respect to the general liability insurance initially obtained by Landlord,
such insurance shall be issued by insurers authorized to do business in the
state in which the Building is located and rated not less than financial class X
and policyholder rating A- in the most recent version of Best's Key Rating
Guide, and shall include a deductible amount of not greater than One Hundred
Thousand Dollars ($100,000.00).

      24. Waivers of Subrogation.

            24.1 Mutual Waiver of Parties. Landlord and Tenant hereby waive
      their rights against each other as well as the officers, partners,
      directors, employees, agents and authorized representatives of Landlord
      and Tenant with respect to any claims or damages or losses (including any
      claims for bodily injury to persons and/or damage to property) which are
      caused by or result from (a) risks to the extent insured against under any
      insurance policy carried by Landlord or Tenant (as the case may be)
      pursuant to the provisions of this Lease and enforceable at the time of
      such damage, loss and/or injury, or (b) risks to the extent the same would
      have been covered under any insurance to the extent required to be
      obtained and maintained by Landlord or Tenant (as the case may be) under
      Paragraphs 22 and 23 of this Lease (as applicable) had such insurance been
      obtained and maintained as required therein. The foregoing waivers shall
      be in addition to, and not a limitation of, any other waivers or releases
      contained in this Lease. In the event that either party elects to
      self-insure for any of the risks for which the self-insuring party is
      required to carry property insurance under this Lease, then the
      self-insuring party shall provide the other party with a commercially
      reasonable form of written release agreement which provides the other
      party with a

                                       24



      release of liability to the same extent and for the same risks as would be
      afforded to the other party under a waiver of subrogation under an
      insurance policy covering the risks for which the self-insuring party has
      elected to self-insure; provided that such release shall be effective upon
      such self-insurance, even without such a written release.

            24.2 Waiver of Insurer. Each party shall cause each insurance policy
      required to be obtained by it pursuant to Paragraphs 22 and 23 (excluding
      Tenant's worker's compensation insurance) to provide that the insurer
      waives all rights of recovery by way of subrogation against either
      Landlord or Tenant, as the case may be, and against the officers,
      employees, agents, partners and authorized representatives of Landlord and
      Tenant in connection with any claims, losses and damages covered by such
      policy. If either party fails to maintain insurance required hereunder,
      such insurance shall be deemed to be self-insured with a deemed full
      waiver of subrogation as set forth in the immediately preceding sentence.

      25. Tenant's Default and Landlord's Remedies.

            25.1 Tenant's Default. The occurrence of any one or more of the
      following events shall constitute a default under this Lease by Tenant:

            (a)   the failure by Tenant to make any payment of rent or
additional rent or any other payment required to be made by Tenant hereunder
within five (5) business days following Tenant's receipt of written notice from
Landlord that such payment is due (Late Payment);

            (b)   the failure by Tenant to timely perform any of those covenants
described in Paragraphs 8.2, 15, 22.2 and 27 of this Lease (which Paragraphs
expressly provide for specific notices and cure periods and provide that
Tenant's failure to comply with the requests or notices within the time periods
provided therein shall be deemed a default by Tenant under this Lease without
any additional notice or cure periods);

            (c)   the failure by Tenant to observe or perform any of the express
or implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in Subparagraphs 25.1(a) or (b) above, where
such failure shall continue for a period of thirty (30) days after Tenant's
receipt of written notice thereof from Landlord to Tenant; provided, however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure, Section 1161 and provided
further that, if the nature of Tenant's default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default if Tenant shall commence such cure within said thirty (30) day
period and thereafter diligently prosecute such cure to completion, which
completion shall occur not later than sixty (60) days from the date of such
notice from Landlord (but provided, however, that if the default does not
materially physically harm the Building or any other part of the Site and it is
objectively impossible to complete such cure within sixty (60) days [excluding
impossibility due to Tenant's financial inability to perform], Tenant shall so
notify Landlord and shall advise Landlord of the actual time period reasonably
necessary to effect such cure, and shall effect such cure within the actual time
period reasonably necessary to not be in default if Tenant effects such cure);
and

            (d)   Except with respect to Tenant's current Bankruptcy which
petition was filed on October 2, 2001 (i) the making by Tenant of any general
assignment for the benefit of creditors, (ii) the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt or a petition for reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days),
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days, or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease where such seizure is not discharged within sixty (60)
days.

            25.2 Landlord's Remedies; Termination. In the event of any such
      default by Tenant, in addition to any other remedies available to Landlord
      under this Lease, at law or in equity, Landlord shall have the immediate
      option to terminate this Lease and

                                       25



      all rights of Tenant hereunder. In the event that Landlord shall elect to
      so terminate this Lease, then Landlord may recover from Tenant:

            (a)   the worth at the time of award of any unpaid rent which had
been earned at the time of such termination; plus

            (b)   the worth at the time of the award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

            (c)   the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus

            (d)   any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom including, but not limited to: attorneys' fees; brokers'
commissions; the costs of refurbishment, alterations, renovation and repair of
the Premises; and removal (including the repair of any damage caused by such
removal) and storage (or disposal) of Tenant's personal property, equipment,
fixtures, Tenant Changes, Leasehold Improvements and any other items which
Tenant is required under this Lease to remove but does not remove.

            As used in Subparagraphs 25.2(a) and 25.2(b) above, the "worth at
the time of award" is computed by allowing interest at the Interest Rate set
forth in Subparagraph 1.18. As used in Subparagraph 25.2(c) above, the "worth at
the time of award" is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).

            25.3 Landlord's Remedies; Re-Entry Rights. In the event of any such
      default by Tenant, in addition to any other remedies available to Landlord
      under this Lease, at law or in equity, Landlord shall also have the right,
      with or without terminating this Lease, to re-enter the Premises and
      remove all persons and property from the Premises; such property may be
      removed, stored and/or disposed of pursuant to Subparagraph 14.4 of this
      Lease or any other procedures permitted by applicable law. No re-entry or
      taking possession of the Premises by Landlord pursuant to this
      Subparagraph 25.3, and no acceptance of surrender of the Premises or other
      action on Landlord's part, shall be construed as an election to terminate
      this Lease unless a written notice of such intention be given to Tenant or
      unless the termination thereof be decreed by a court of competent
      jurisdiction.

            25.4 Landlord's Remedies: Continuation of Lease. In the event of any
      such default by Tenant, in addition to any other remedies available to
      Landlord under this Lease, at law or in equity, Landlord shall have the
      right to continue this Lease in full force and effect, whether or not
      Tenant shall have abandoned the Premises. The foregoing remedy shall also
      be available to Landlord pursuant to California Civil Code Section 1951.4
      and any successor statute thereof in the event Tenant has abandoned the
      Premises. In the event Landlord elects to continue this Lease in full
      force and effect pursuant to this Subparagraph 25.4, then Landlord shall
      be entitled to enforce all of its rights and remedies under this Lease,
      including the right to recover rent as it becomes due. Landlord's election
      not to terminate this Lease pursuant to this Subparagraph 25.4 or pursuant
      to any other provision of this Lease, at law or in equity, shall not
      preclude Landlord from subsequently electing to terminate this Lease or
      pursuing any of its other remedies.

            25.5 Rights and Remedies Cumulative. All rights, options and
      remedies of Landlord contained in this Paragraph 25 and elsewhere in this
      Lease (including Paragraph 29 below) shall be construed and held to be
      cumulative, and no one of them shall be exclusive of the other, and
      Landlord shall have the right to pursue any one or all of such remedies or
      any other remedy or relief which may be provided by law or in equity,
      whether or not stated in this Lease. Nothing in this Paragraph 25 shall be

                                       26



      deemed to limit or otherwise affect Tenant's indemnification of Landlord
      pursuant to any provision of this Lease.

            25.6 Arbitration. Should a dispute arise between the parties
      regarding any matter described above, then except with respect to actions
      for unlawful or forcible detainer, either party may cause the dispute to
      be submitted to JAMS/ENDISPUTE ("JAMS") in Orange County, California, for
      binding arbitration. However, each party reserves the right to seek a
      provisional remedy by judicial action. No arbitration election by either
      party pursuant to this subparagraph shall be effective if made later than
      thirty (30) days following service of a judicial summons and complaint by
      or upon such party concerning the dispute. The arbitration shall be
      conducted in accordance with the rules of practice and procedure of JAMS
      and otherwise pursuant to the California Arbitration Act (Code of Civil
      Procedure Section 1280 et seq.). The arbitrator shall apportion the costs
      of the arbitration, together with the attorneys' fees of the parties, in
      the manner deemed equitable by the arbitrator, it being the intention of
      the parties that the prevailing party ordinarily be entitled to recover
      its reasonable costs and fees. Judgment upon any award rendered by the
      arbitrator may be entered by any court having jurisdiction

      26. Landlord's Default. Landlord shall not be in default in the
performance of any obligation required to be performed by Landlord under this
Lease unless Landlord has failed to perform such obligation within thirty (30)
days after the receipt of written notice from Tenant specifying in detail
Landlord's failure to perform; provided however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance, then Landlord shail not be deemed in default if it commences
such performance within such thirty (30) day period and thereafter diligently
pursues the same to completion. Upon any such uncured default by Landlord,
Tenant may exercise any of its rights provided in law or at equity; provided,
however: (a) Tenant shall have no right to offset or abate rent in the event of
any default by Landlord under this Lease, except to the extent offset rights are
specifically provided to Tenant in this Lease; and (b) Tenant's rights and
remedies hereunder shall be limited to the extent (I) Tenant has expressly
waived in this Lease any of such rights or remedies and/or (ii) this Lease
otherwise expressly limits Tenant's rights or remedies, including the limitation
on Landlord's liability contained in Paragraph 34 hereof.

      27. Subordination. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or
Site, or any lessor of any ground or master lease now or hereafter affecting all
or any portion of the Building or Site, this Lease shall be subject and
subordinate at all times to such ground or master leases (and such extensions
and modifications thereof), and to the lien of such mortgages and deeds of trust
(as well as to any advances made thereunder and to all renewals, replacements,
modifications and extensions thereof). As a condition precedent to the
effectiveness of any such subordination of this Lease to any future ground or
master leases or the lien of any future mortgages or deeds of trust, Landlord
shall provide to Tenant a commercially reasonable non-disturbance and attornment
agreement in recordable form in favor of Tenant in a mutually acceptable form
executed by such future ground lessor, master lessor, mortgagee or deed of trust
beneficiary, as the case may be, which shall provide that Tenant's quiet
possession of the Premises shall not be disturbed on account of such
subordination to such future lease or lien so long as Tenant is not in default
beyond any applicable cure period under any provisions of this Lease.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any or all ground or master leases or the lien of any
or all mortgages or deeds of trust to this Lease. In the event that any ground
or master lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the
election of Landlord's successor in interest, Tenant shall attorn to and become
the tenant of such successor. Tenant hereby waives its rights under any current
or future law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver to Landlord within fifteen (15) business days
after receipt of written demand by Landlord and in the form reasonably required
by Landlord, any additional documents evidencing the priority or

                                       27



subordination of this Lease with respect to any such ground or master lease or
the lien of any such mortgage or deed of trust. Should Tenant fail to sign and
return any such documents within said 15 business day period, Tenant shall be in
default hereunder without the benefit of any additional notice or cure periods
specified in Subparagraph 25.1 above.

      28. Estoppel Certificate.

            28.1 Tenant's Obligations. Within twenty (20) business days
      following Landlord's written request, Tenant shall execute and deliver to
      Landlord an estoppel certificate, in a form satisfactory to Landlord's
      current or future lender certifying: (a) the Commencement Date of this
      Lease; (b) that this Lease is unmodified and in full force and effect (or,
      if modified, that this Lease is in full force and effect as modified, and
      stating the date and nature of such modifications); (c) the date to which
      the rent and other sums payable under this Lease have been paid; (d) that
      there are not, to the best of Tenant's knowledge, any defaults under this
      Lease by either Landlord or Tenant, except as specified in such
      certificate; and (e) such other matters as are reasonably requested by
      Landlord (which matters may be certified to the best of Tenant's knowledge
      to the extent such matters are not capable of being objectively known to
      Tenant with certainty). Landlord's request for such an estoppel
      certificate shall be delivered to Tenant and to Tenant's Law Department
      (provided Tenant has supplied Landlord with a current address for Tenant's
      Law Department) by certified or express mail or by overnight delivery
      service (such as Federal Express), with other copies provided in the
      manner specified in this Lease for delivery of notices. Any such estoppel
      certificate delivered pursuant to this Subparagraph 28.1 may be relied
      upon by any mortgagee, beneficiary, purchaser or prospective purchaser of
      any portion of the Site, as well as their assignees.

            28.2 Tenant's Failure to Deliver. Tenant's failure to deliver such
      estoppel certificate within such time shall be conclusive upon Tenant
      that: (a) this Lease is in full force and effect without modification,
      except as may be represented by Landlord; (b) there are no uncured
      defaults in Landlord's or Tenant's performance; and (c) Other than
      deposits provided for in Section 1.16, not more than one (1) month's
      rental has been paid in advance.

      29. PERFORMANCE BY TENANT; INTEREST AND LATE CHARGES.

            29.1 Landlord's Right to Perform. Except as specifically provided
      otherwise in this Lease, all covenants and agreements by Tenant under this
      Lease shall be performed by Tenant at Tenant's sole cost and expense and
      without any abatement or offset of rent. If Tenant shall fail to pay any
      sum of money (other than Annual Basic Rent) or perform any other act on
      its part to be paid or performed hereunder and such failure shall continue
      for three (3) days with respect to monetary obligations (or ten (10) days
      with respect to non-monetary obligations) after Tenant's receipt of
      written notice thereof from Landlord, Landlord may, without waiving or
      releasing Tenant from any of Tenant's obligations, make such payment or
      perform such other act on behalf of Tenant. All sums so paid by Landlord
      and all necessary incidental costs incurred by Landlord in performing such
      other acts shall be payable by Tenant to Landlord within five (5) days
      after Tenant's receipt of demand therefore as additional rent. The
      foregoing rights are in addition to any and all remedies available to
      Landlord upon Tenant's default as described in Paragraph 25.

            29.2 Interest. If any monthly installment of Annual Basic Rent or
      Excess Expenses, or other amount payable by Tenant or Landlord hereunder
      is not received by the other party within ten (10) days after the date
      when due, it shall bear interest at the Interest Rate set forth in
      Subparagraph 1.19 from the date due until paid.

            29.3 Late Charges. Tenant acknowledges that, in addition to interest
      costs, the late payments by Tenant to Landlord of any Annual Basic Rent or
      other sums due under this Lease will cause Landlord to incur costs not
      contemplated by this Lease, the exact amount of such costs being extremely
      difficult and impractical to fix. Such other costs include, without
      limitation, processing, administrative and accounting charges and late
      charges that may be imposed on Landlord by the terms of any mortgage, deed
      of trust or related loan documents encumbering the Premises, the Building
      or the Site. Accordingly, if any monthly installment of Annual Basic Rent
      or Excess Expenses or any other amount

                                       28



      payable by Tenant hereunder is not received by Landlord by the due date
      thereof, Tenant shall pay to Landlord an additional sum of four percent
      (4%) of the overdue amount as a late charge. The parties agree that such
      late charge represents a fair and reasonable estimate of the costs that
      Landlord will incur by reason of any late payment as hereinabove referred
      to by Tenant, and the payment of late charges and interest are distinct
      and separate in that the payment of interest is to compensate Landlord for
      the use of Landlord's money by Tenant, while the payment of late charges
      is to compensate Landlord for Landlord's processing, administrative and
      other costs incurred by Landlord as a result of Tenant's delinquent
      payments. Acceptance of a late charge or interest shall not constitute a
      waiver of Tenant's default with respect to the overdue amount or prevent
      Landlord from exercising any of the other rights and remedies available to
      Landlord under this Lease or at law or in equity now or hereafter in
      effect.

      30. Cure Rights of Landlord's Mortgagees and Lessors. In the event of any
default on the part of Landlord, Tenant will give notice by registered or
certified mail to any beneficiary of a deed of trust or mortgagee covering the
Premises or ground lessor of Landlord whose address shall have been furnished to
Tenant, and shall offer such beneficiary, mortgagee or ground lessor the same
opportunity to cure the default as is afforded Landlord pursuant to this Lease.
Landlord's current lender contact information is on the attached Exhibit H.

      31. Transfer of Owner's Interest. The term "Landlord" as used in this
Lease, so far as covenants or obligations on the part of the Landlord are
concerned, shall be limited to mean and include only the owner or owners, at the
time in question, of the fee title to, or a Iessee's interest in a ground lease
of, the Site. In the event of any transfer or conveyance of any such title or
interest (other than a transfer for security purposes only), the transferor
shall be automatically relieved of all covenants and obligations on the part of
Landlord contained in this Lease accruing after the date of such transfer or
conveyance to the extent the transferee expressly assumes the same. Landlord and
Landlord's transferees and assignees shall have the absolute right to transfer
all or any portion of their respective title and interest in the Site, the
Building, the Premises and/or this Lease without the consent of Tenant, and such
transfer or subsequent transfer shall not be deemed a violation on Landlord's
part of any of the terms and conditions of this Lease.

      32. Quiet Enjoyment. Landlord covenants and agrees with Tenant that, upon
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease.

      33. Parking.

            33.1 Tenant's Parking Spaces. During the Term of this Lease (as the
      same may be extended or renewed), Landlord shall provide to Tenant the
      number of parking spaces specified in Subparagraph 1.21 hereof for use by
      Tenant's employees or a nonexclusive basis in the common parking areas for
      the Building within the Project, as designated by Landlord from time to
      time. Landlord shall at all times have the right to establish and modify,
      on a non- discriminatory basis, the nature and extent of the parking areas
      for the Building and Project (including whether such areas shall be
      surface, underground and/or other structures) as long as Tenant is
      provided, on a non-discriminatory basis, the number of parking spaces
      designated in Subparagraph 1.21. Tenant and its employees shall be
      provided access to the parking areas for the Project seven (7) days a week
      and twenty-four (24) hours per day. Throughout the entire Lease Term (as
      the same may be extended and/or renewed) the parking spaces provided to
      Tenant as specified in Subparagraph 1.21 and visitor parking for Tenant's
      guests and invitees shall be free of charge. However, all costs of
      operating, maintaining and repairing the parking areas shall be included
      as Operating Expenses.

            33.2 Visitor Parking. In addition to such parking spaces for use by
      Tenant's employees, Landlord shall permit access to the parking areas for
      Tenant's visitors, subject to availability of spaces.

            33.3 Parking Rules. The use of the parking areas shall be subject to
      the Parking Rules and Regulations attached hereto as Exhibit "H" and any
      other reasonable, non-

                                       29



      discriminatory rules and regulations adopted by Landlord and/or Landlord's
      parking operators from time to time, including any system for controlled
      ingress and egress. Tenant shall not use more parking spaces than its
      allotment and shall not use any parking spaces specifically assigned by
      Landlord to other tenants of the Building or Project or for such other
      uses as visitor parking. Tenant's parking spaces shall be used only for
      parking by vehicles no larger than normally sized passenger automobiles or
      pick-up trucks and vans. Tenant shall not permit or allow any vehicles
      that belong to or are controlled by Tenant or Tenant's employees,
      suppliers, shippers, customers or invitees to be loaded, unloaded, or
      parked in areas other than those designated by Landlord for such
      activities. If Tenant permits or allows any of the prohibited activities
      described herein, then Landlord shall have the right, without notice, in
      addition to such other rights and remedies that it may have, to remove or
      tow away the vehicle involved and charge the cost thereof to Tenant, which
      cost shall be immediately payable by Tenant upon demand by Landlord.

      34. Limitation on Landlord's Liability. Notwithstanding anything contained
      in this Lease to the contrary, the obligations of Landlord under this
      Lease (including any actual or alleged breach or default by Landlord) do
      not constitute personal obligations of the individual partners, directors,
      officers, members or shareholders of Landlord or Landlord's partners, and
      Tenant shall not seek recourse against the individual partners, directors,
      officers, members or shareholders of Landlord or Landlord's partners, or
      any of their personal assets for satisfaction of any liability with
      respect to this Lease. In addition, in consideration of the benefits
      accruing hereunder to Tenant and notwithstanding anything contained in
      this Lease to the contrary, Tenant hereby covenants and agrees for itself
      and all of its successors and assigns that the liability of Landlord for
      its obligations under this Lease (including any liability as a result of
      any actual or alleged failure, breach or default hereunder by Landlord),
      shall be limited to the fair market value of Landlord's equity interest in
      the Site. The foregoing provisions are not intended to relieve Landlord
      from the performance of any of Landlord's obligations under this Lease,
      but only to limit the personal liability of Landlord in case of recovery
      of a judgment against Landlord, nor shall this Paragraph 34 be deemed to
      limit Tenant's rights to obtain injunctive relief or specific performance
      or other remedy which may be accorded Tenant at law, in equity or under
      this Lease.

      35. Hazardous Materials.

            35.1 Tenant's and Landlord's Covenants. In addition to its other
      obligations under this Lease (including Paragraph 8 hereof), Tenant
      covenants to comply with all applicable laws relating to Hazardous
      Materials with respect to the Premises, the Building and the Site. Except
      for general office supplies typically used in an office area in the
      ordinary course of business (such as copier toner, liquid paper, glue,
      ink, and cleaning solvents), for use in the manner for which they were
      designed and only in accordance with all Hazardous Materials laws and the
      highest standards prevailing in the industry for such use, and then only
      in such amounts as may be normal for the office business operations
      conducted by Tenant on the Premises, neither Tenant nor any Tenant Parties
      (as defined in Subparagraph 19.1) shall use, handle, store or dispose of
      any Hazardous Materials in, on, under or about the Premises, the Building
      or the Site. Tenant shall promptly take all actions, at its sole cost and
      expense, as are necessary to return the Premises, Building, Site and
      Project to the condition existing prior to the introduction of any such
      Hazardous Materials by Tenant or any Tenant Parties, provided Landlord's
      approval of such actions shall first be obtained, except in the case of an
      emergency, in which case Tenant shall notify Landlord of such actions as
      soon as is reasonably possible. Furthermore, Tenant shall immediately
      notify Landlord of any inquiry, test, investigation or enforcement
      proceeding by or against Tenant or the Premises concerning the presence of
      any Hazardous Material. In addition to its other obligations under this
      Lease, Landlord covenants to comply with all applicable laws relating to
      Hazardous Materials with respect to the Premises, the Building and the
      Site. Except for general office supplies typically used in an office area
      in the ordinary course of business, except for petroleum, oils, and other
      items used in connection with the operation of automobiles and other
      equipment, and except for common and customary construction materials
      (including, without limitation, solvents, lubricants, fuels, mastics and
      adhesives) and common cleaning and janitorial supplies reasonably
      necessary for the maintenance, operation, repair and improvement of the
      Project, Building and the Site, for use in the manner for which they were
      designed and only in accordance with all Hazardous Materials laws and
      reasonable prudent standards prevailing in the industry for such use, and
      then only in such amounts as may be normal for the

                                       30



      office business operations conducted by Landlord on the Site, neither
      Landlord nor any of Landlord's partners, officers, contractors, directors
      or employees (collectively, "Landlord Parties") shall use, handle, store
      or dispose of any Hazardous Materials in, on, under or about the Premises,
      the Building or the Site in violation of any restrictions or limitations
      contained in this Lease or applicable law. Landlord shall promptly provide
      Tenant with any notices relating to Hazardous Materials which Landlord is
      obligated to provide Tenant under applicable laws. In addition, neither
      Tenant nor any Tenant Parties shall allow any Noxious Substances or,
      except as expressly permitted by this Paragraph 35, Hazardous Materials,
      to be released into, flow or seep into, or be placed into the Premises.
      Tenant shall promptly take all actions, at its sole cost and expense, as
      are necessary to maintain the Premises, Building, Site and Project in the
      condition existing prior to the introduction of any Hazardous Materials
      and/or Noxious Substances by Tenant or any Tenant Parties. Tenant shall
      promptly provide Landlord with any notices relating to Hazardous Materials
      which Tenant is obligated to provide Landlord under applicable laws. To
      Landlord's actual knowledge, the Site does not contain any Hazardous
      Materials as of the date of this Lease, except as permitted by this
      Subparagraph 35.1.

            35.2 Indemnities. Tenant shall be solely responsible for and shall
      indemnify, defend (with counsel reasonably approved by Landlord) and hold
      Landlord harmless from and against any and all claims, judgments, suits,
      causes of action, damages, penalties, fines, liabilities, losses and
      expenses (including, without limitation, investigation and clean-up costs,
      attorneys' fees, consultant fees and court costs) which arise during or
      after the Term of this Lease as a result of Tenant's breach of any of the
      obligations and covenants set forth in Subparagraph 35.1 above, and/or any
      contamination of the Premises, Building, Site or Project directly or
      indirectly arising from the activities of Tenant or any Tenant Parties.
      Tenant shall not be responsible for any costs or expenses relating the
      remediation or cleanup of Hazardous Materials which were located on the
      Project prior to the date of this Lease or which are placed or discharged
      on or about the Project by Landlord, Landlord's employees, contractors or
      agents or any individual or entity other than Tenant or one or more Tenant
      Parties.

            35.3 Definition of Hazardous Materials. For purposes of this Lease,
      the term "Hazardous Materials" shall mean, collectively, asbestos, any
      petroleum fuel, and any hazardous or toxic substance, material or waste
      which is or becomes regulated by any local governmental authority, the
      State of California or the United States Government, including, but not
      limited to, any material or substance defined as a "hazardous waste,"
      "extremely hazardous waste," "restricted hazardous waste," "hazardous
      substance," "hazardous material" or "toxic pollutant" under the California
      Health and Safety Code and/or under the Comprehensive Environmental
      Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq.

            35.4 Survival. The foregoing covenants and indemnities of Tenant and
      Landlord shall survive the expiration or earlier termination of the Lease.

      36. Miscellaneous.

            36.1 Governing Law. This Lease shall be governed by, and construed
      pursuant to, the laws of the State of California.

            36.2 Successors and Assigns. Subject to the provisions of Paragraph
      31 above, and except as otherwise provided in this Lease, all of the
      covenants, conditions and provisions of this Lease shall be binding upon,
      and shall inure to the benefit of, the parties hereto and their respective
      heirs, personal representatives and permitted successors and assigns;
      provided, however, no rights shall inure to the benefit of any Transferee
      of Tenant unless the Transfer to such Transferee is made in compliance
      with the provisions of Paragraph 16, and no options or other rights which
      are expressly made personal to the original Tenant hereunder or in any
      rider attached hereto shall be assignable to or exercisable by anyone
      other than the original Tenant under this Lease.

            36.3 No Merger. The voluntary or other surrender of this Lease by
      Tenant or a mutual termination thereof shall not work as a merger and
      shall, at the option of Landlord, either (a) terminate all or any existing
      subleases, or (b) operate as an assignment to Landlord of Tenant's
      interest under any or all such subleases. 36.2

                                       31



            36.4 Professional Fees. If either Landlord or Tenant should bring
      suit against the other with respect to this Lease, including for unlawful
      detainer or any other relief against the other hereunder, then all costs
      and expenses incurred by the prevailing party therein (including, without
      limitation, its actual appraisers', accountants', attorneys' and other
      professional fees and court costs) shall be paid by the other party.

            36.5 Waiver. The waiver by either party of any breach by the other
      party of any term, covenant or condition herein contained shall not be
      deemed to be a waiver of any subsequent breach of the same or any other
      term, covenant and condition herein contained, nor shall any custom or
      practice which may become established between the parties in the
      administration of the terms hereof be deemed a waiver of, or in any way
      affect, the right of any party to insist upon the performance by the other
      in strict accordance with said terms. No waiver of any default of either
      party hereunder shall be implied from any acceptance by Landlord or
      delivery by Tenant (as the case may be) of any rent or other payments due
      hereunder or any omission by the non-defaulting party to take any action
      on account of such default if such default persists or is repeated, and no
      express waiver shall affect defaults other than as specified in said
      waiver. The subsequent acceptance of rent hereunder by Landlord shall not
      be deemed to be a waiver of any preceding breach by Tenant of any term,
      covenant or condition of this Lease other than the failure of Tenant to
      pay the particular rent so accepted, regardless of Landlord's knowledge of
      such preceding breach at the time of acceptance of such rent.

            36.6 Joint and Several Liability. If more than one person or entity
      executes this Lease as Tenant: (a) each of them is and shall be jointly
      and severally liable for the covenants, conditions, provisions and
      agreements of this Lease to be kept, observed and performed by Tenant; and
      (b) the act or signature of, or notice from or to, any one or more of them
      with respect to this Lease shall be binding upon each and all of the
      persons and entities executing this Lease as Tenant with the same force
      and effect as if each and all of them had so acted or signed, or given or
      received such notice.

            36.7 Terms and Headings. The words "Landlord" and "Tenant" as used
      herein shall include the plural as well as the singular. Words used in any
      gender include other genders. The paragraph headings of this Lease are not
      a part of this Lease and shall have no effect upon the construction or
      interpretation of any part hereof except that underlined words within
      Section 1 are defined terms and not headings.

            36.8 Time. Time is of the essence with respect to performance of
      every provision of this Lease in which time or performance is a factor.
      All references in this Lease to "days" shall mean calendar days unless
      specifically modified herein to be "business" days.

            36.9 Prior Agreements; Amendments. This Lease (and the Exhibits and
      Riders attached hereto) contain all of the covenants, provisions,
      agreements, conditions and understandings between Landlord and Tenant
      concerning the Premises and any other matter covered or mentioned in this
      Lease, and no prior agreement or understanding, oral or written, express
      or implied, pertaining to the Premises or any such other matter shall be
      effective for any purpose. No provision of this Lease may be amended or
      added to except by an agreement in writing signed by the parties hereto or
      their respective successors in interest. The parties acknowledge that all
      prior agreements, representations and negotiations are deemed superseded
      by the execution of this Lease to the extent they are not expressly
      incorporated herein.

            36.10 Separability. The invalidity or unenforceability of any
      provision of this Lease (except for Tenant's obligation to pay Annual
      Basic Rent and Excess Expenses under Paragraphs 5 and 6 hereof) shall in
      no way affect, impair or invalidate any other provision hereof, and such
      other provisions shall remain valid and in full force and effect to the
      fullest extent permitted by law.

            36.11 Exhibits and Riders. All Exhibits and Riders attached to this
      Lease are hereby incorporated in this Lease as though set forth at length
      herein.

            36.12 Signs and Auctions. Tenant shall have the right to install
      eyebrow level signage on the exterior of the subject building in
      conformance with the Foothill Plaza and City of Lake Forest sign
      regulations. The size, font type, color and location of the sign shall be
      subject to

                                       32



      Landlord's approval. Additionally, Tenant shall have an identity sign on
      the entry door of the Premises. Tenant shall have no right to conduct any
      auction in, on or about the Premises, the Building or Site.

            36.13 Accord and Satisfaction. No payment by Tenant or receipt by
      Landlord of a lesser amount than the rent payment herein stipulated shall
      be deemed to be other than on account of the rent, nor shall any
      endorsement or statement on any check or any letter accompanying any check
      or payment as rent be deemed an accord and satisfaction, and Landlord may
      accept such check or payment without prejudice to Landlord's right to
      recover the balance of such rent or pursue any other remedy provided in
      this Lease. Tenant agrees that each of the foregoing covenants and
      agreements shall be applicable to any covenant or agreement either
      expressly contained in this Lease or imposed by any statute or at common
      law.

            36.14 Financial Statements. Upon ten (10) days prior written request
      from Landlord (which Landlord may make at any time during the Term but no
      more often than one (1) time in any calendar year), Tenant shall deliver
      to Landlord (a) a current annual report, or if not applicable, financial
      statement of Tenant, and (b) annual reports, or if not applicable,
      financial statements of Tenant for the two (2) years prior to the current
      financial statement year. Such annual report or statements shall be
      prepared in accordance with generally accepted accounting principles and
      certified as true in all material respects by Tenant (if Tenant is an
      individual) or by an authorized officer or general partner of Tenant (if
      Tenant is a corporation or partnership, respectively).

            36.15 Tenant's Authority. If Tenant executes this Lease as a
      partnership, limited liability company or corporation, then Tenant and the
      persons and/or entities executing this Lease on behalf of Tenant represent
      and warrant that: (a) Tenant is a duly authorized and existing
      partnership, limited liability company or corporation, as the case may be,
      and is qualified to do business in the state in which the Building is
      located; (b) such persons and/or entities executing this Lease are duly
      authorized to execute and deliver this Lease on Tenant's behalf in
      accordance with the Tenant's partnership agreement (if Tenant is a
      partnership), operating agreement (if Tenant is a limited liability
      company) or a duly adopted resolution of Tenant's board of directors and
      the Tenant's by-laws (if Tenant is a corporation); and (c) this Lease is
      binding upon Tenant in accordance with its terms.

            36.16 Landlord's Lien Waiver. If Tenant desires to purchase subject
      to a security interest, lease or obtain a loan secured by Tenant's
      personal property in the Premises and requests that Landlord execute a
      lien waiver in connection therewith waiving Landlord's lien rights to such
      personal property. Landlord agrees to execute such a lien waiver on
      Landlord's standard form. Notwithstanding the foregoing, however, if
      Landlord incurs processing costs (including attorneys' fees) in connection
      with such reasonable request which exceed $300.00, then Tenant shall
      reimburse such excess costs to Landlord within fifteen (15) days following
      Tenant's receipt of invoice(s) therefore. Nothing in this Subparagraph
      36.16 shall permit Tenant to encumber its leasehold interest in the
      Premises.

            36.17 Confidentiality. ALL DOCUMENTS, TERMS, PROVISIONS, AND
      CONDITIONS RELATING TO THIS LEASE, including, without limitation, all
      details of Basic Rent, Operating Expenses, and any options (collectively
      referred to as the "Agreement Details"), ARE CONFIDENTIAL. Except as may
      be reasonably required to obtain Bankruptcy court approval, Tenant, its
      agents, employees, invitees and representatives shall maintain the
      strictest confidence regarding the Agreement Details. Under no
      circumstances shall Tenant, its agents, employees, invitees or
      representatives discuss or disclose to any other individual or entity (or
      representative of same) any of the Agreement Details. Further, Tenant
      shall be solely responsible for and shall indemnify, protect, defend (with
      counsel reasonably approved by Landlord) and hold Landlord harmless from
      and against any and all claims, judgments, suits, causes of action,
      damages, penalties, fines, liabilities, losses and expenses (including,
      without limitation, loss of prospective tenants, rents, sales or other
      business or profits, attorneys' fees, consultant fees and court costs)
      which arise during or after the term of this Lease as a result of the
      breach of any of the obligations and covenants set forth in this
      Subparagraph, and/or any other disclosure by Tenant, its agents,
      employees, invitees or representatives of any Agreement Details/Tenant's
      indemnification obligations under this Subparagraph shall survive the
      expiration or earlier

                                       33



      termination of this Lease. This Subparagraph shall not be deemed to
      prohibit disclosure to the extent that the disclosure is required by law.

            36.18 Waiver of Jury Trial. Landlord and Tenant each acknowledge
      that it is aware of and has had the advice of counsel of its choice with
      respect to its right to trial by jury, and each party does hereby
      expressly and knowingly waive and release all such rights to trial by jury
      in any action, proceeding or counterclaim brought by either party hereto
      against the other (and/or against its officers, directors, employees,
      agents, or subsidiary or affiliated entities) on any matters whatsoever
      arising out of or in any way connected with this lease, tenant's use or
      occupancy of the premises, and/or any claim of injury or damage.

            36.19 Reasonableness. Whenever the Lease grants Landlord or Tenant
      the right to take action, exercise discretion, establish rules and
      regulations or make allocations or other determinations. Landlord and
      Tenant shall act reasonably and in good faith and take no action Which
      might result in the frustration of the reasonable expectations of a
      sophisticated landlord and sophisticated tenant concerning the benefits to
      be enjoyed under the Lease.

            36.20 Bankruptcy Approval. This lease shall not take effect or be
      binding on either party until and unless approved by the Bankruptcy Court
      presiding over the Tenant's bankrupt estate.

                                       34



      IN WITNESS WHEREOF, the parties have executed this Lease as of the day and
year first above written.

"LANDLORD"                            CT FOOTHILL 10/241, LLC,
                                      a California limited liability company

                                      By: CT FOOTHILL PLAZA LLC,
                                      a California limited liability company,
                                      its Managing Member

                                          BY: CT REALTY CORPORATION,
                                          a California corporation,
                                          its Managing Member

                                          By: /s/ Robert M. Campbell
                                             -----------------------------------
                                             Robert M. Campbell, President

                                          By: FOOTHILL 10/241, LLC,
                                          a California limited liability company

                                          By: /s/ Robert J. Searles
                                              ----------------------------------
                                              Robert J. Searles, Member

"TENANT"                              FOUNTAIN VIEW, Inc.,
                                      a Delaware corporation

                                      By: /s/ ILLEGIBLE
                                          --------------------------------------
                                      Its: CEO
                                          --------------------------------------

                                      By:
                                          --------------------------------------
                                      Its:
                                          --------------------------------------

                                       35


                            ANNUAL BASIC RENT RIDER
                          RIDER NO. 1 TO OFFICE LEASE

      This Rider No. 1 is made and entered into by and between FOUNTAIN VIEW,
INC. ("Tenant'), and CT FOOTHILL 10/241, LLC, a California limited liability
company ("Landlord"), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that,
the provisions set forth below shall be deemed to be part of the Lease and shall
supersede any inconsistent provisions of the Lease. All references in the Lease
and in this Rider to the "Lease" shall be construed to mean the Lease (and all
exhibits attached thereto), as amended and supplemented by this Rider. All
capitalized terms not defined in this Rider shall have the same meaning as set
forth in the Lease.

      Subject to any adjustment of the Rentable Square Feet (RSF) of the
Premises pursuant to Exhibit "C", the Annual Basic Rent and Monthly Basic Rent
as of the Commencement Date and as set forth in Paragraph 1 of the Lease shall
be in accordance with the following schedule (Term below does not include the
period of Free Early Occupancy equal to an additional three and one half
months):



Months During Term                Annual Basic Rent      Monthly Basic Rent/RSF
- ------------------                -----------------      ----------------------
                                                 
      01-30*                         $498,556.80*      $41,546.40/$2.10 per RSF*
      31-60                          $510,427.20       $42,535.60/$2.15 per RSF
      61-78                          $522,297.60       $43,524.80/$2.20 per RSF
      79-90                          $534,168.00       $44,514.00/$2.25 per RSF


Provided Tenant is not in Default under
the terms of the Lease during the period
in which the abatement is to occur, the
following rent abatements shall apply:



Months During Term When a Portion of the    *Monthly Amount Abated    *Monthly Amount Abated/RSF
- ----------------------------------------    ----------------------    --------------------------
        Rent is Abated
        --------------
                                                                
            06-17                                $20,773.20                  $1.05 per RSF


                                       36



                         OUTSIDE COMMENCEMENT DATE RIDER

                          RIDER NO. 2 TO OFFICE LEASE

      This Rider No. 2 is made and entered into by and between FOUNTAIN VIEW
INC. ("Tenant"), and CT FOOTHILL 10/241, LLC, a California limited liability
company ("Landlord"), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that,
the provisions set forth below shall be deemed to be part of the Lease and shall
supersede any inconsistent provisions of the Lease. All references in the Lease
and in this Rider to the "Lease" shall be construed to mean the Lease (and all
exhibits attached thereto), as amended and supplemented by this Rider. All
capitalized terms not defined in this Rider shall have the same meaning as set
forth in the Lease.

            1.    The provisions of Subparagraph 4.2 of the Lease to the
contrary notwithstanding, in the event that the Early Occupancy Date has not
occurred by March 1, 2003 (the "Outside Date") as a result of Landlord's failure
to substantially complete the Leasehold Improvements by such date, which Outside
Date shall be extended day for day by the number of days of Tenant Delays (as
such term is defined in Exhibit "D" to the Lease) and by up to sixty (60) days
of Force Majeure Delays (as defined below), then Tenant shall have the right to
deliver a notice to Landlord (the "Termination Notice") electing to terminate
the Lease effective as of the date of Landlord's receipt of such Termination
Notice (the "Effective Date"). Except as provided herein below, the Termination
Notice must be delivered by Tenant to Landlord, if at all, not earlier than the
Outside Date and not later than ten (10) business days after the Outside Date.
If Tenant timely delivers the Termination Notice to Landlord, then Landlord
shall have the right to suspend the Effective Date for a period of thirty (30)
days after the Effective Date stated in the Termination Notice. In order to
suspend the Effective Date, Landlord must deliver to Tenant, within ten (10)
days after receipt of the Termination Notice, a written statement of Landlord's
contractor in charge of construction certifying that in such contractor's good
faith judgment the Leasehold Improvements will be substantially completed within
thirty (30) days after the Effective Date. If the Leasehold Improvements are
substantially completed or the Early Occupancy Date otherwise occurs within said
thirty (30)-day suspension period, then the Termination Notice shall be of no
further force or effect.

            2.    If, prior to the Outside Date (as so extended by Tenant Delays
and Force Majeure Delays), Landlord determines that the Early Occupancy will not
occur by such Outside Date as a result of Landlord's failure to substantially
complete the Leasehold Improvements thereby, Landlord shall have the option to
deliver a written notice to Tenant stating Landlord's opinion as to the date by
which the Leasehold Improvements may be substantially completed and Tenant shall
be required, within ten (10) business days after receipt of such notice, to
either deliver the Termination Notice (which will mean that the Lease shall
thereupon terminate and shall be of no further force and effect) or agree to
extend the Outside Date to that date which is set by Landlord. If the Outside
Date is so extended, Landlord's right to request Tenant to elect to either
terminate or further extend the Outside Date shall remain and shall continue to
remain, with each of the notice periods and response periods set forth above,
until the Leasehold Improvements are substantially completed or the Lease is
terminated, as applicable.

            3.    Subject to the limitations specified herein above, the
Effective Date and Outside Date above shall be extended day for day to the
extent of any Tenant Delays and "Force Majeure Delays". "Force Majeure Delays"
shall mean and refer to a period of delay or delays encountered by Landlord
affecting the work of construction of the Leasehold Improvements because of
delays due to: excess time in obtaining governmental permits or approvals beyond
the time period normally required to obtain such permits or approvals for
similar space, similarly improved in similar office buildings in the area of the
Building; fire, earthquake, inclement weather or other acts of God; acts of the
public enemy; riot; insurrection; governmental regulation of the sales of
materials or supplies or the transportation thereof; strikes or boycotts;
shortages of material or labor; or any other cause beyond the reasonable control
of Landlord.

                                       1



                            FIRST AMENDMENT TO LEASE

I. PARTIES AND DATE

      This First Amendment to Lease (the "Amendment") dated as of February
5,2004 (the "Effective Date"), is by and between Skilled Healthcare Group, Inc,
a Delaware corporation, (formerly known as Fountain View, Inc., a Delaware
corporation, ("Tenant*') and CT FOOTHILL 10/241, LLC, a California limited
liability company ("Landlord").

II. RECITALS

      A.    By a lease dated August 26,2002, (the "Original Lease") Landlord did
      lease to Tenant the Premises, which consists of space as generally shown
      on the floor plans attached to the original lease as Exhibit "B-l",
      located in the building whose address is 27442 Portola Parkway, Foothill
      Ranch, California.

      B.    Landlord and Tenant each desire to modify the Lease to expand the
      Premises and make such other modifications as are set for in
      III. "MODIFICATIONS" next below.

III. MODIFICATIONS. Effective as of the Effective Date, the lease is hereby
amended as follows:

      A.    Additional Expansion Space. Tenant shall lease an additional 4,818
      rentable square feet and 4,236 usable on the ground floor of the 27442
      building ("Additional Expansion Space"). This expands their currently
      occupied space to a new total rentable square footage of 24,734. This is
      depicted on the floor plan attached to this Amendment as Exhibit "A" and
      incorporated herein by this reference, for a term equal to the men
      unexpired portion of the Lease Term of the Premises, whereupon the space
      shall be deemed a part of the Premises. Tenant's lease of the Additional
      Expansion Space shall be subject to all of the terms of the Lease except:
      (i) as specified below in this Amendment; (ii) the Basic Rent for the
      Additional Expansion Space shall be as described in Paragraph E of the
      Amendment; (iii) the Operating Expense Base Year shall be the same as is
      provided for the Premises; and (iv) effective as of the Commencement Date
      for the Additional Expansion Space, Landlord shall provide Tenant with
      additional unreserved parking according to the provisions of Paragraph 121
      of the Lease.

      B.    Expansion Space Improvements: Landlord shall provide "Build to Suit"
      tenant improvements in the Additional Expansion Space per a Mutually
      acceptable space plan, the total cost of which shall not exceed $10.00 per
      useable square foot ("Expansion Space Improvements"). Tenant shall have
      the right to occupy the Additional Expansion Space at any time after the
      Expansion Space Improvements have been substantially completed. Tenant
      shall be obligated to pay Basic Rent, Excess Expenses and any other
      charges for the Additional Expansion Space as of the agreed upon Rent
      Commencement Date as stated below.

      C.    Early Occupancy: Tenant will be granted three (3) months of Basic
      Rent Free Early Occupancy beginning the earlier of April 1,2004 or upon
      substantial completion of the Expansion Space Improvements ("Early
      Occupancy Date").

      D.    Rent Commencement Date: Tenant shall begin paying Basic Rent, Excess
      Expenses and any other charges for the Additional Expansion Space upon the
      earlier of July 1,2004 or three (3) months after the Early Occupancy Date.

                                       1



      E.    Basic Rent - Upon the Rent Commencement Date and continuing through
      the then unexpired portion of the initial Lease Term of the Premises, the
      monthly Basic Rent for the Additional Expansion Space shall be as follows:



      MONTHS                         MONTHLY BASIC RENT
      ------                         ------------------
                                  
      01-30                          $10,395.00 ($2.10 per Rentable Square Foot)
      31-60                          $10,642.50 ($2.15 per Rentable Square Foot)
      61-75.5                        $10,890.00 ($2.20 per Rentable Square Foot)


      So long as Tenant is not in default under the terms of the Lease and this
      First Amendment, Tenant shall receive a reduction in rent for the
      Additional Expansion Space based on the following schedule:



      ABATED RENT MONTHS             DOLLAR AMOUNT ABATED
      ------------------             --------------------
                                  
      02-13                          $5,197.50 ($1.05 per Rentable Square Foot)


      Upon execution of this amendment, Tenant shall pay the First Months Rent
      as per the above terms. All other terms per the original lease through
      termination shall remain the same.

      F.    First Months Rent: Upon the execution of this amendment, Tenant
      shall pay to the Landlord the First Months rent as per the Basic Rent
      terms.

      G.    Security Deposit: Not Applicable

      H.    Reserved Parking Spaces: Tenant, at Tenant's expense, will be
      allowed to install eight (8) reserved parking spaces at a location in the
      parking lot approved by the Landlord

IV. GENERAL

      A.    Effect of Amendment. This Lease shall remain in full force and
      effect except to the extent that it is modified by this Amendment.

      B.    Entire Agreement. This Amendment embodies the entire understanding
      between Landlord and Tenant with respect to the modifications set forth in
      "III. Modifications" above and can be changed only by a writing signed by
      Landlord and Tenant.

      C.    Counterparts. This Amendment may be executed in counterparts, and it
      shall be binding upon the parties as if all of said parties executed the
      original hereof. It is agreed that a facsimile transmission of an executed
      copy of this Amendment may be relied upon as conclusive evidence of the
      execution of this Amendment by the party whose signature is shown below on
      such facsimile transmission.

      D.    Defined Terms. All words commencing with initial capital letters in
      this Amendment and defined in the Lease shall have the same meaning in
      this amendment as in the Lease, unless they are otherwise defined in this
      Amendment.

      E.    Corporate. Partnership, etc. Authority. If either party is a
      corporation, limited liability company, partnership or other entity, or is
      comprised of any or all of them, each individual executing this Amendment
      for the corporation, limited liability company, partnership or other
      entity represents that he or she is duly authorized to execute and deliver
      this Amendment on behalf of the respective corporation, limited liability
      company, partnership or other entity in accordance with its terms.

                                       2



                                  EXHIBIT "A"

                                  (FLOOR PLAN)

EX-12.1

Exhibit 12.1

SKILLED HEALTHCARE GROUP, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio amounts)

	Year			Year			Year			Year			Year			Six Months			Six Months
	Ended			Ended			Ended			Ended			Ended			Ended			Ended
	2001			2002			2003			2004			2005			30-Jun-05			30-Jun-06
Interest Expense	$	27,538		$	25,175		$	27,486		$	22,370		$	27,629		$	11,123		$	22,839
Less Interest Income		(548	)		(588	)		(147	)		(789	)		(949	)		(362	)		(628	)
Deferred Financing Fees Amortization		3,682			1,893			1,550			1,155			1,657			794			1,424
Preference Security Dividend		—			—			—			782			837			837			—
Interest Portion of Rental Expense		2,611			2,636			3,004			4,111			4,776			2,388			2,516
Total Fixed Charges		33,283			29,116			31,893			27,629			33,950			14,780			26,151
(Loss) income before (benefit from) provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle		(143,928	)		(2,145	)		(5,296	)		18,153			7,778			7,635			13,489
Plus:
Fixed Charges		33,283			29,116			31,893			27,629			33,950			14,780			26,151
Less:
Preference security dividend of consolidated subsidiaries		—			—			—			(782	)		(837	)		(837	)		—
(Losses) Earnings	$	(110,645	)	$	26,971		$	26,597		$	45,000		$	40,891		$	21,578		$	39,640
Fixed Charges	$	33,283		$	29,116		$	31,893		$	27,629		$	33,950		$	14,780		$	26,151
Ratio of Earnings to Fixed Charges		(3.32	)		0.93			0.83			1.63			1.20			1.46			1.52
Earnings shortfall	$	(143,928	)	$	(2,145	)	$	(5,296	)

EX-21.1

                                                                               .
                                                                               .
                                                                               .

                                                                    EXHIBIT 21.1

                         SUBSIDIARIES  OF THE REGISTRANT




NAME OF SUBSIDIARY                                                  STATE OF INCORPORATION
                                                                    OR ORGANIZATION
- ------------------------------------------------------------------------------------------
                                                                 
Hallmark Investment Group, Inc.                                     Delaware
Summit Care Corporation                                             Delaware
Summit Care Pharmacy, Inc.                                          Delaware
Alexandria Care Center, LLC                                         Delaware
Alta Care Center, LLC                                               Delaware
Anaheim Terrace Care Center, LLC                                    Delaware
Baldwin Healthcare and Rehabilitation Center, LLC                   Delaware
Bay Crest Care Center, LLC                                          Delaware
Briarcliff Nursing and Rehabilitation Center GP, LLC                Delaware
Brier Oak on Sunset, LLC                                            Delaware
Carehouse Healthcare Center, LLC                                    Delaware
Carmel Hills Healthcare and Rehabilitation Center, LLC              Delaware
Carson Senior Assisted Living, LLC                                  Delaware
Clairmont Beaumont GP, LLC                                          Delaware
Clairmont Longview GP, LLC                                          Delaware
Colonial New Braunfels GP, LLC                                      Delaware
Colonial Tyler GP, LLC                                              Delaware
Comanche Nursing Center GP, LLC                                     Delaware
Coronado Nursing Center GP, LLC                                     Delaware
Devonshire Care Center, LLC                                         Delaware
East Walnut Property, LLC                                           Delaware
Elmcrest Care Center, LLC                                           Delaware
Eureka Healthcare and Rehabilitation Center, LLC                    Delaware
Flatonia Oak Manor GP, LLC                                          Delaware
Fountain Care Center, LLC                                           Delaware
Fountain Senior Assisted Living, LLC                                Delaware
Fountain View Subacute and Nursing Center, LLC                      Delaware
Glen Hendren Property, LLC                                          Delaware
Granada Healthcare and Rehabilitation Center, LLC                   Delaware
Guadalupe Valley Nursing Center GP, LLC                             Delaware
Hallettsville Rehabilitation GP, LLC                                Delaware
Hallmark Rehabilitation GP, LLC                                     Delaware
Hancock Park Rehabilitation Center, LLC                             Delaware
Hancock Park Senior Assisted Living, LLC                            Delaware
Hemet Senior Assisted Living, LLC                                   Delaware
Highland Healthcare and Rehabilitation Center, LLC                  Delaware
Holmesdale Healthcare and Rehabilitation Center, LLC                Delaware
Holmesdale Property, LLC                                            Delaware
Hospice Care Investments, LLC                                       Delaware
Hospice Care of the West, LLC                                       Delaware
Hospitality Nursing GP, LLC                                         Delaware
Leasehold Resource Group, LLC                                       Delaware
Liberty Terrace Healthcare and Rehabilitation Center, LLC           Delaware






NAME OF SUBSIDIARY                                                  STATE OF INCORPORATION
                                                                    OR ORGANIZATION
- ------------------------------------------------------------------------------------------
                                                                 
Live Oak Nursing Center GP, LLC                                     Delaware
Louisburg Healthcare and Rehabilitation Center, LLC                 Delaware
Montebello Care Center, LLC                                         Delaware
Monument Rehabilitation GP, LLC                                     Delaware
Oak Crest Nursing Center GP, LLC                                    Delaware
Oakland Manor GP, LLC                                               Delaware
Pacific Healthcare and Rehabilitation Center, LLC                   Delaware
Preferred Design, LLC                                               Delaware
Richmond Healthcare and Rehabilitation Center, LLC                  Delaware
Rio Hondo Subacute and Nursing Center, LLC                          Delaware
Rossville Healthcare and Rehabilitation Center, LLC                 Delaware
Royalwood Care Center, LLC                                          Delaware
Seaview Healthcare and Rehabilitation Center, LLC                   Delaware
Sharon Care Center, LLC                                             Delaware
Shawnee Gardens Healthcare and Rehabilitation Center, LLC           Delaware
Skilled Healthcare, LLC                                             Delaware
Southwest Payroll Services, LLC                                     Delaware
Southwood Care Center GP, LLC                                       Delaware
Spring Senior Assisted Living, LLC                                  Delaware
St. Elizabeth Healthcare and Rehabilitation Center, LLC             Delaware
St. Joseph Transitional Rehabilitation Center, LLC                  Delaware
St. Luke Healthcare and Rehabilitation Center, LLC                  Delaware
Sycamore Park Care Center, LLC                                      Delaware
Texas Cityview Care Center GP, LLC                                  Delaware
Texas Heritage Oaks Nursing and Rehabilitation Center GP, LLC       Delaware
The Clairmont Tyler GP, LLC                                         Delaware
The Earlwood, LLC                                                   Delaware
The Heights of Summerlin, LLC                                       Delaware
The Woodlands Healthcare Center GP, LLC                             Delaware
Town and Country Manor GP, LLC                                      Delaware
Travelmark Staffing, LLC                                            Delaware
Valley Healthcare Center, LLC                                       Delaware
Villa Maria Healthcare Center, LLC                                  Delaware
Vintage Park at Atchison, LLC                                       Delaware
Vintage Park at Baldwin City, LLC                                   Delaware
Vintage Park at Gardner, LLC                                        Delaware
Vintage Park at Lenexa, LLC                                         Delaware
Vintage Park at Louisburg, LLC                                      Delaware
Vintage Park at Osawatomie, LLC                                     Delaware
Vintage Park at Ottawa, LLC                                         Delaware
Vintage Park at Paola, LLC                                          Delaware
Vintage Park at Stanley, LLC                                        Delaware
Wathena Healthcare and Rehabilitation Center, LLC                   Delaware
West Side Campus of Care GP, LLC                                    Delaware
Willow Creek Healthcare Center, LLC                                 Delaware
Woodland Care Center, LLC                                           Delaware
Briarcliff Nursing and Rehabilitation Center, LP                    Delaware
Clairmont Beaumont, LP                                              Delaware
Clairmont Longview, LP                                              Delaware






NAME OF SUBSIDIARY                                                  STATE OF INCORPORATION
                                                                    OR ORGANIZATION
- ------------------------------------------------------------------------------------------
                                                                 
Colonial New Braunfels Care Center, LP                              Delaware
Colonial Tyler Care Center, LP                                      Delaware
Comanche Nursing Center, LP                                         Delaware
Coronado Nursing Center, LP                                         Delaware
Flatonia Oak Manor, LP                                              Delaware
Guadalupe Valley Nursing Center, LP                                 Delaware
Hallettsville Rehabilitation and Nursing Center, LP                 Delaware
Hallmark Rehabilitation, LP                                         Delaware
Hospice of the West, LP                                             Delaware
Hospitality Nursing and Rehabilitation Center, LP                   Delaware
Live Oak Nursing Center, LP                                         Delaware
Monument Rehabilitation and Nursing Center, LP                      Delaware
Oak Crest Nursing Center, LP                                        Delaware
Oakland Manor Nursing Center, LP                                    Delaware
SHG Resources, LP                                                   Delaware
Southwood Care Center, LP                                           Delaware
Texas Cityview Care Center, LP                                      Delaware
Texas Heritage Oaks Nursing and Rehabilitation Center, LP           Delaware
The Clairmont Tyler, LP                                             Delaware
The Woodlands Healthcare Center, LP                                 Delaware
Town and Country Manor, LP                                          Delaware
Travelmark Staffing, LP                                             Delaware
West Side Campus of Care, LP                                        Delaware

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our reports dated September 15, 2006, in the Registration Statement (Form S-4) and related Prospectus of Skilled Healthcare Group, Inc. for the registration of $200,000,000 of its 11% Senior Subordinated Notes due 2014, expected to be filed on or about October 6, 2006.

/s/ Ernst & Young LLP  

Orange County, California
October 2, 2006